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  • Tool insurance will cover your equipment in the event of loss, damage or theft
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What our Nerds say about tool insurance

KRISTINA

BUSINESS NERD

Your tools are the backbone of your business. If they were broken or got stolen, you may well find yourself out of pocket for repairs or replacements, which could have an impact on your business’s finances.

Tool insurance could cover the cost of repairing your tools if they were damaged by fire or flooding or the cost of replacements if they were stolen. That way, you could keep your business moving.

This type of insurance covers many industries, so whether you’re a plumber, electrician or office worker, you can protect the tools that are most important to your business.

What is tool insurance?

Tool insurance is a type of insurance cover that can pay out if your tools are damaged or stolen. It is typically bought as part of a larger business insurance package, but it can also be purchased as a standalone policy from certain providers.

How does tool insurance work?

If your tools were damaged or stolen and you needed to replace or repair them, your tool insurance could pay out to help cover the cost. You would need to report the incident to your insurer, along with details of what happened, so they could assess your claim. If approved, your insurer would then pay out for repairs, or arrange for your tools to be replaced.

What does tool insurance cover?

Tool insurance can cover the cost of replacing or repairing your tools if they are stolen, accidentally lost or damaged. Each insurer may have different limits, cover options and exceptions, so it’s always worth checking the ‘Summary of cover’ document or policy wording provided before taking out a policy.

Generally speaking, you can cover a range of portable tools, as well as some business equipment under a tool insurance policy, including:

  • hand tools, such as screwdrivers, spanners and saws
  • power tools, such as drills, sanders and angle grinders
  • plant equipment (hired or your own)
  • laptops and tablets
  • mobile phones
  • TVs and printers

The types of devices and tools you can insure under a tool insurance policy may vary between insurers. Depending on your trade, business equipment insurance could be worth investigating instead of tools insurance as it can cover laptops and mobile phones. This varies by provider so it’s worth checking which product is most suitable for your needs.

When you get a quote, you can give details of the types of tools and equipment you want to insure, so that your policy can be tailored to your business’s specific needs. Click ‘Get a quote’ above to get started.

What doesn’t tool insurance cover?

There may be exceptions to your cover. Your insurer will specify these in the terms and conditions of your policy, so it’s important to read this carefully to help make sure the cover fits your needs.

What’s more, you may not be covered by your insurance if you don’t store your tools safely. For example, if something was stolen from your unlocked van while you were out buying lunch.

You may also not be fully covered if you undervalue your tools when taking out insurance. Not giving an insurer an accurate valuation of your tools could lead to you being underinsured, which means your insurer may reduce how much you can claim – and you could end up getting less than you expect.

Do I need tool insurance?

Tool insurance isn’t a legal requirement, but you may want to consider it if you would struggle to afford replacement tools if yours were stolen, got lost or were damaged in a fire or flood.

Imagine your tools were damaged by a fire that broke out midway through a construction job. If you couldn’t afford to replace or repair your tools quickly, you could face delays – costly for you and inconvenient for your client. Tool insurance could pay out for the cost of replacements so you could minimise the disruption faced by your business.

What should I think about when buying tool insurance?

When looking for cover for your tools, you should think about what could be best for your business. Paying for the maximum level of cover may not be appropriate if you do not have many tools to insure – you could find yourself overinsured and paying out more than you need to for your insurance premium.

That said, it’s also important not to be underinsured. If you underestimate the value of your tools and then need to make a claim, your insurer may not pay out as much as you expect.

You should also think about whether you want a standalone policy or whether you want to take out tool cover as part of a bigger business insurance package. Some insurers only allow you to take it out alongside another product such as public liability insurance, while others offer tool insurance by itself.

How much does tool insurance cost?

The price of tool insurance depends on a number of factors, including:

  • how many tools you want to insure
  • how much your tools are worth
  • what your business does

As insurance quotes are tailored to your business needs, it is difficult to pinpoint how much your tool insurance would be without knowing your specific circumstances. Tool insurance can cost just a few pounds a month, but could be much more depending on your requirements.

You can get a personalised quote by clicking on the ‘Get a quote’ button above.

How do I get tool insurance?

If you already have a business insurance policy, you can contact your insurer to add tool insurance to your existing package. Alternatively, you can set up a new package or buy tool cover as a standalone policy from some insurers.

» COMPARE: Tool insurance

How to choose the best tool insurance

To find the best tool insurance for your business, you need to think about the tools you own, how much they’re worth, and how much cover you want. You should also consider extra cover you may need, such as if you store your tools in your van overnight or if you want cover for your tools while travelling.

Tool Insurance FAQs

What is tools in transit insurance?

Tools in transit insurance covers your tools if they were stolen or damaged while you were driving. This can also include damage to tools during loading or unloading of your vehicle.

Similarly to tool insurance, tools in transit cover can pay out for repairs or new tools or provide replacements, depending on what your insurer offers.

Not all tool insurance policies will include tools in transit cover as standard – you may have to purchase it as a standalone policy or add-on, depending on the insurer.

Tools in transit cover doesn’t generally include mobile phones and laptops, so check whether you have personal possessions cover as part of your home insurance policy if these belong to you or if they are covered under your company’s business equipment insurance if it is a work laptop or phone.

How can I keep my tools safe?

To keep your tools safe, you should store them in a secure location when not in use. This could be in a locked building such as a garage or in a locked vehicle. You may have to pay an additional fee to cover tools which are stored in locked vehicles.

In general, you can help protect your vehicle or building with an intruder alarm. Thames Valley Police recommend marking your tools with a postcode or phone number as this can also act as a deterrent against thieves, making these goods harder to sell on if stolen.

You may also want to consider registering your tools with Immobilise, the UK National Property Register. If your tools were stolen but later recovered, they could be returned to you through this system.

It’s important to store your tools safely to deter thieves and ensure you don’t invalidate your cover. If you don’t store your tools securely and they are stolen, your insurer could refuse your claim – for example, if you stored your tools in an unlocked shed overnight and someone walked in and stole them.

Can you get insurance for power tools?

Yes, tool insurance can include cover for power tools. However, it’s worth checking with insurers to make sure they cover the types of tool you have.

Tool insurance can also cover hand tools and plant equipment (whether it’s your own or it’s hired). Some providers may also insure laptops, mobile phones and other similar devices as part of their tool cover, though this varies so it’s important to check if this is something you are looking for.

Can I insure my tools in a company van?

You can get cover for your tools while they are stored in a van, whether it’s yours or owned by a company you work for. This protection may already be included in a policy you have, or you may have to look at purchasing a standalone policy.

For example, some tool insurance policies may include cover for tools that are stored in a van. Alternatively, you may find that tools stored in your van are covered under your business van insurance.

For more details, you can talk to an insurance company about the options available for your specific circumstances.

Does public liability insurance cover stolen tools?

Public liability insurance does not cover you or your property. If your tools were stolen, you would not be able to make a claim on your public liability insurance. To protect your goods in case of theft, you could consider taking out tool insurance, business contents insurance or business equipment insurance instead.

Public liability insurance covers third parties if they get injured, are ill or die as a result of your work. It also covers loss or damage to their property if caused by your work.

What other types of insurance should I consider?

The cover you may need as part of a broader business insurance policy varies with every business. You can choose from a suite of products to tailor your policy to fit your business needs.

If you employ anyone working in the UK who’s not a family member, you’re legally required to take out employers’ liability insurance.

Professionals such as solicitors and accountants must have professional indemnity insurance, as it’s required by the regulatory bodies for these industries. If clients rely on your professional services or advice, you may want to think about taking out this type of insurance.

If you have regular contact with clients and members of the public, you may want to consider public liability insurance. This can cover you if someone was injured, ill or died or their property was lost or damaged because of your work.

You can find information about different business insurance products and get a quote for your business with NerdWallet.

» COMPARE: Business insurance

About the author

Kristina Fox
Kristina is a writer at NerdWallet. A recent graduate trading French for finance, she has experience creating content for student newspaper Cherwell and an edtech company. Read more
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