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  • A guide to tool insurance

    A guide to tool insurance

    Updated 04/06/2020

    When you're a tradesman in the UK your tools are an essential part of helping you complete a contract. So to lose them suddenly, and without warning, wouldn't just be an inconvenience. It would ultimately cripple your business. Taking you out of service and out of pocket. For many businesses not having tool insurance could stop your income stream in an instant, putting your business, and potentially your home, in jeopardy.

    It's a scary and sobering thought. But with tool thefts from vans on the rise in the UK, more and more tradesmen are finding themselves in this unfortunate situation. With current crime statistics revealing that a van gets broken into every 23 minutes in Britain on average. Van tool insurance is therefore critical.

    Our tool insurance includes:

    • Cover up to £25,000
    • Can provide as a standalone policy
    • All risks policy
    • European cover options
    • Low excess
    • Great rates for small businesses
    • Flexible payment terms

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    Insurance will protect your tools from theft or damage

    As an expert craftsman knows, the right tools aren't always easy or cost effective to come by. Tools are often one of a trade-based business's biggest expenses. Not quick or inexpensive to replace if stolen or damaged.

    That's why it's so important to ensure your tools are properly protected with the right tool insurance policy. Making sure that you read the small print carefully, and understand the conditions of your policy. Particularly surrounding tool storage overnight, and any exclusions or excesses.

    That way, if you are the unfortunate victim of a tool burglary, or damage your tools as a result of an accident, you'll be able to make a quick and easy claim for compensation. One that not only pays out enough cover to purchase your tools again, but also reimburses you for lost earnings on the days you've been unable to work as a result of your tool loss.

    Types of tool insurance

    Like other types of insurance (travel, buildings, contents) tool insurance cover comes in a variety of plan and policy types. With different levels of cover available which should be assessed against your unique needs and circumstances. In other words, just because you happen to have a friend in the trade who also insures his or her own tools, doesn't necessarily mean the policy they've put into effect will also be right for you.

    Insurance policies can be taken out over different terms, and can vary in their comprehensiveness. All of which affect what you're covered for, and the premium you'll pay each month or year. While it doesn't hurt to seek advice from fellow tradesmen in the field, ultimately you should look to a professional insurance broker to guide you in terms of the correct policy.

    Adding on tool insurance to an existing business policy

    In the majority of cases tool’s cover is offered as an add-on as part of a public liability, specialist tradesman or van insurance policy. If you have more than one policy that protects your business interests, don't be tempted to get tool insurance added to both. In the event that a claim does arise, this will complicate matters greatly. Neither insurer will pay out in full, and you'll ultimately be left with a proportioned claim, which could see you paying out twice on excess, and losing out in the long term.

    The three most common ways of insuring your tools as a tradesman:

    Van insurance (with tool cover added-on)

    If you're working in a trade profession the likelihood is you have a business or work van to conduct your day-today operations. Like your tools, this business asset will need to be insured accordingly to protect you in the event of break-ins, accidents, theft, or damage. All of which can result in your van being taken off the road temporarily, disrupting business as usual.

    You can elect to also include tool cover as an add-on to a van insurance policy with some providers. Just be clear on the terms of the cover, including any security measures you need to implement to ensure your van tool insurance policy is valid. Such as alarms, locks, or removing your tools from the vehicle overnight. You should also check that your van insurance policy also covers your tools in transit, and when outside of the van too.

    Public Liability insurance (with tool cover added-on)

    Public liability insurance is an absolute non-negotiable if you're in the trade. It protects you in the event that a member of the public gets injured as a consequence of your actions. As well as damage to their property as a result of the work you're undertaking. Including paying out any legal fees and compensation claims. So it's a vital policy to put into effect when your work puts you in direct contact with members of the public every day.

    If you already have public liability insurance set up, speak to your provider to see if you can add tool cover to your existing policy. Most insurers will offer this as an option when you first take out cover. But it's always best to double check this is the case, rather than discover too late that your tools weren't automatically covered as assumed.

    Tradesman insurance or trade-specific insurance policies

    Tradesman insurance is essentially a more comprehensive type of public liability insurance, specifically aimed at those working in a professional trade. With these types of trades-focused insurance policies, you'll generally be offered a range of optional add-ons such as tool insurance to extend your policy above and beyond just public liability alone.

    These include employer's liability insurance (a legal requirement if you employ staff on a full time, contractor or voluntarily basis). Together with personal accident and plant cover, as well as contract works cover, business stock and equipment cover - namely tools. These policies give you greater flexibility to design a single comprehensive insurance policy that takes into account multiple areas of your business. Allowing you to tailor each level of cover independently, accordingly to your personal business needs.

    Things to bear in mind with tool insurance

    With so many different types of tool insurance on the market it's important to identify the right policy to take out. Not only from a recurring cost point of view. But also in terms of the level of protection you'll be guaranteed, if your tools are lost, damaged or stolen.

    Check the policy wording

    Be sure to read any tool insurance policy documents through thoroughly, taking time to understand the terms, and any requirements on your part. For example, any excess you may be expected to contribute, before your insurer pays out on a claim. Similarly, take note of any stipulated exclusions outlined in your cover, as these could potentially leave you vulnerable in certain situations.

    Ensure the cover level is enough

    The higher the level of cover you take out, the more your monthly or annual insurance premiums will amount to. But don't be tempted to undervalue your tools just to save a few pounds. If you do have to replace your entire tool stock you need to ensure the lump sum pay out will be enough to purchase replacement tools from new. To the exact same quality as the ones you lost.

    In the same vein, it's also important to check if your policy offers 'new for old' cover. Otherwise your insurer may only pay out the tool's depreciated value, rather than the actual price you paid for it at time of purchase.

    What is not included in your insurance policy

    Although tool insurance protects you for theft and loss, most insurances will not cover you for the following:
    • Deliberate damage
    • Wear or tear on your tools from frequent use
    • Manufacturing faults
    • Confiscation from a lawful force
    • Cosmetic damage
    • Third part damages

    These issues are likely not to be covered under your tools insurance unless stated otherwise. Any wear or tear such as scratches, dents and intentional damage is not included in standard tool insurance. This includes any mechanical or manufacturing faults – usually these will be covered under warranty.

    Catalogue your tools and keep receipts

    Although the hope is that you'll never have to make a tool insurance claim, it's important to get into the habit of cataloguing your tools none the less. As this will speed things up if you do suffer a break-in and the worse does occur.
    Make a note of your tool's serial number and model and keep the receipts in a safe place. This information will prove invaluable when it comes to helping the police trace any stolen tools, as well as backing up your insurance claim with proof of purchase and ownership.

    How to protect your tools from theft

    As most tools are rather expensive, they are attractive items for criminals to steal and usually sell on for their own gain. 

    There are some things you can do to prevent tool theft. Such as never leaving your tools unattended when on site. When working on site, keep track of your personal tools and make sure they are safely locked away if they aren’t being used and out of sight of others. You should even consider marking your property with your name or alternatively, mark them with an invisible marker to make them easier to find should someone steal them. 

    If you keep your tools locked in a van or vehicle, you should routinely check that the security alarm is working to prevent any thefts. 

    How to make a claim

    In the unfortunate event where you do have to make a claim on your tool insurance, be it from theft or damage, this is how you will need to make a claim. 

    First, you will need to take all necessary precautions explained in your tools insurance terms policy. You must ensure that you keep records and receipts up to date for all of your tools. This should include documentation of all specifications such as serial numbers and manufacturing codes, including photos. 

    If your tools are stolen, then you will need to immediately report it to the police before notifying your insurance provider. Gather all the information and evidence you have to assist with both your claim to convict and find your stolen goods, but also so your insurance provider is fully aware of what items are missing, including their value. In most cases the insurer will provide you with a sum of money to replace or repair your tools.

    Is tool insurance worth it?

    If you rely on your tools to run your business and they are expensive to replace, is tool insurance worth it? Yes. The reassurance knowing that your tools are covered under an insurance policy will help ease the stress of a very difficult and stressful situation. 

    Be safe, not sorry

    While there are many ways to ensure your tools are protected day and night, and deter criminals from making your van their next target, it's never worth taking the risk when it comes to tool insurance. A policy that costs just a few pounds per month could make the difference between your business surviving a break-in, or going under. So don't take any chances. Speak to one of our expert advisors and get your protection policy put into effect today.

    Bluedrop services also provide the following business insurance options:

    Fleet Insurance

    Professional Indemnity Insurance

    Liability Insurance

    Landlord Insurance

    Want to find out more about Bluedrop's Commercial Insurance?
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