Tools & Equipment Insurance for Nevada Contractors

Contractor’s Tools & Equipment insurance is a specialized Inland Marine coverage that protects the tools, machinery, and equipment contractors need to complete their jobs. Whether you are a general contractor, electrician, plumber, carpenter, or other trade or artisan contractor, your tools are critical to your business operations. A Contractor’s Tools & Equipment policy will pay for repairing or replacing your tools and equipment if they are stolen, damaged, or lost.

Tools & Equipment Insurance Application

Why Do Contractors Need Specialized Coverage for Their Tools & Equipment?

Contractor’s Tools and Equipment insurance is critical for several reasons:

• Your tools and equipment represent a significant investment – without them you can’t work. A Contractor’s Tools & Equipment policy ensures you don’t have to bear the full cost of replacements or repairs out of pocket.
• The policy allows for prompt replacement or repair of damaged or stolen tools, reducing downtime and maintaining project schedules.
• Knowing your tools and equipment are covered helps you focus on your work and provides peace of mind should something happen.

Also, bear in mind, General Liability, Auto, and Property insurance will not cover stolen, damaged, or lost mobile tools and equipment. This includes your tools and equipment on a job site or in transit.

In addition, theft of construction tools and equipment is prevalent. According to data by the National Equipment Register (NER), Verisk Insurance Solutions, and the National Insurance Crime Bureau (NICB), there are more than 11,000 incidents of construction equipment theft each year.  The estimated annual loss from equipment theft on construction sites is $1 billion.

Some of the most common stolen construction items include new and used power tools. They are easy to steal and can be resold online. The top five most stolen equipment pieces from job sites, included wheeled or tracked loaders, including backhoes and skid steers; towables, including generators, light towers, and chippers; excavators; and trailers.

What Does Contractor’s Tools & Equipment Insurance Cover?

Contractor’s Tools & Equipment insurance covers your tools and equipment on your job sites, temporary locations, and while in transit. This is crucial since most tool damage occurs on the job site, and most thefts occur during transport. The policy covers hand tools and big equipment like excavators and backhoes. It will cover the cost of replacing stolen tools and equipment and repairing or replacing items damaged by fire, vandalism, or a workplace accident that damages the tools.

A policy can be designed to include temporary coverage for rental equipment.

Note: General wear and tear of tools and equipment is not covered.

Contractor’s Tools & Equipment Policy Options

Replacement Cost (RC) vs. Actual Cash Value (ACV)

Replacement Cost coverage pays the full cost of replacing a stolen or damaged tool with a brand-new equivalent while Actual Cash Value pays only the depreciated value of the tools at the time of loss.

In deciding whether you want RC or ACV coverage, look at the tools and equipment being covered, as well as the requirements of a bank or leasing company if the equipment is financed. If your equipment was financed or rented from a location that requires insurance, notify your insurance agent. This ensures that the policy's limits correspond to the requirements specified in the lease or loan contracts.

Scheduled vs. Blanket Policy

Scheduled coverage requires each piece of equipment to be individually listed on the policy while a blanket policy covers all tools under a set coverage limit, rather than listing each item. In Nevada, tools and equipment valued at $5,000 or less can be insured on a blanket basis.

Who Should Buy Contractor’s Tools and Equipment Insurance?

Contractor’s Tools & Equipment insurance is critical for any contractor who uses tools and equipment in their line of work, no matter the size of the business and scope of projects. This includes:

• General Contractors: Managing multiple projects and teams requires a variety of tools and equipment.
• Specialty Contractors: Electricians, plumbers, HVAC technicians, and other specialists often use expensive and specialized tools.
• Carpenters and Masons: Tools like saws, drills, and masonry equipment are crucial for their work.
• Landscapers: Landscaping requires tools and machinery that can be costly to replace.
• Independent Contractors: Those who work on multiple sites and projects benefit from the financial protection this insurance provides.

 How Much Does Contractor’s Tools & Equipment Insurance Cost?

The price of a Contractor’s Tools & Equipment policy varies and is based on coverage amount, coverage type, deductibles, coverage extensions, tool or equipment type, security measures, and insurance requirements. The policy costs anywhere from $199 to $600 to cover basic contractor hand tools. Premiums for larger equipment vary greatly depending on the equipment's year, make, model, and replacement value. 

The following costs are general estimates: