Tools & Equipment Insurance for Oregon Contractors

A Contractor’s Tools & Equipment policy should be an essential part of the insurance tool box for contractors in Oregon to protect against financial loss. Tools and equipment are the foundation of your livelihood. Whether you’re a general contractor, drywaller, plumber, electrician, roofer, or landscaper, your tools help you keep projects on schedule and to complete them. If your equipment is stolen or damaged, you need the right policy in place.

Tools & Equipment Insurance Application

Why Oregon Contractors Need Tools & Equipment Insurance

Many contractors believe their General Liability, Auto, or Property policy will step in and pay for theft or damage to their tools and equipment. This isn’t the case. If tools or equipment are stolen from a job site, lost in transit, or damaged at the project’s location, these policies won’t cover the loss.

Moreover, there are common risks that make coverage necessary:

• Theft: Job sites and construction vehicles are prime targets for thieves looking to steal high-value power tools and machinery. There are more than 11,000 incidents of construction equipment theft annually, according to data by the National Equipment Register (NER), Verisk Insurance Solutions, and the National Insurance Crime Bureau (NICB). The estimated annual loss from equipment theft on construction sites is $1 billion.
• Loss in Transit: Moving from one job site to another increases the risk of tools being stolen or damaged while on the move.
• Damage: Tools and equipment can be damaged as result of a fire or weather-related event, including wind, hail, and flood.

What Is Covered with a Contractor’s Tools & Equipment Insurance Policy?

Contractor’s Tools & Equipment insurance covers theft, vandalism, and loss due to fire, wind, hail, or water. This policy covers tools and equipment for theft from a job site, storage unit, or work truck. They are also covered if damaged or stolen while being transported.

Some policies can be designed to include temporary coverage for rental equipment.

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

What Options Are Available with Contractor’s Tools & Equipment Insurance?

When selecting a policy, contractors can choose a policy based on Replacement Cost (RC) or Actual Cash Value (ACV).

Replacement Cost coverage pays the full cost of replacing a stolen or damaged tool with a brand-new equivalent. RC coverage works well for newer or high-value tools where full replacement is necessary.

Actual Cash Value pays only the depreciated value of a tool at the time of loss and is best for older tools that have already lost significant value.

In deciding whether you want RC or ACV coverage, it’s important to consider 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, contact your insurance agent. This ensures that the policy's limits correspond to the requirements specified in the lease or loan contracts.

Contractors can choose between two types of coverage structures:

Scheduled coverage requires each piece of equipment to be individually listed on the policy and is best for higher-value items. Scheduling items requires careful inventory tracking.

A blanket policy covers all tools under a set coverage limit, rather than listing each item. This is best for smaller power tools, drills, saws, and hand tools that contractors frequently replace. In Oregon, tools and equipment valued at $1,000 or less can be insured on a blanket basis.

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

The cost of a Contractor’s Tools & Equipment insurance varies depending on several factors:  coverage amount, coverage type, deductibles, coverage extensions, tool or equipment type, security measures, and insurance requirements. A policy can cost 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: