Should I consider tool insurance for my business?
With Tool theft in the U.K. becoming an increasingly bigger problem year on year with a 30% increase in theft throughout 2016/2017, we thought it would be good to break down the benefits of tool insurance.
Tool theft is one of the biggest concerns for tradespeople alongside negative online reviews. This comes as no surprise considering that tool theft may have run up a bill of £94,521,600 last year, according to new research.
Freedom of Information (FOI) data exclusively obtained from various police constabularies by Trade Direct Insurance, reveals tool theft is so common that up to 215 tradespeople every single day could have their tools stolen. Not only is this a major inconvenience to tradespeople but a costly problem too. Tradespeople and mechanics without tool insurance would have to work one whole additional week just to cover the cost of repairing damaged tools or replacing stolen tools. This equates to 450,000 additional working days for tradespeople and mechanics in the U.K.
The autumn-winter season sees a spike in tool theft with October and November being the busiest months for tool thieves. London and Bristol had the most reported tool thefts, whilst Rotherham’s tradespeople suffered the highest loss of value. Sheffield, Northampton, Leicester and Leeds are the next most affected cities, with Birmingham Bradford and Manchester climbing up the table.
Motor trade workers that are involved with repairing and modifying vehicles will also know how important and valuable tools are for their business. Tools are considered by many mechanics as the most important asset to their business, along side business premises and a company vehicle.
What is tool insurance?
Tool insurance is designed to protect tradespeople and mechanics in the event of theft, loss or damage to the tools used within the business.
Risks can include weather related damage such as floods and storms, fire damage and also malicious damage, vandalisim and theft. The level of risk to tools can vary depending on where they are stored.
Tool insurance provides protection against these risks on the tools you use on jobs. If your tools are lost, damaged, or stolen, tool insurance can replace the tools so that you can continue working and earning a living.
Some policies will even include compensation if additional hire is needed due to delays in repairing or replacing your lost or damaged tools.
At constructaquote.com, we have a Contractors All Risk policy which is designed to protect businesses against all such risks.
Do I need tool insurance?
Many tradesmen and mechanics have tools stored at a business premises which are usually covered by the companies insurance policy. However, what happens when these tools are taken out of the premises and on the road?
Tools stored in a van are a welcome invitation for thieves and where mechanics are concerned, the type of equipment used in a roadside repair is very easy for thieves to carry away, sell for a high price, and are difficult to trace.
Losing your tool box can be a serious and very costly setback, however, having the right insurance policy in place could help to cushion the blow by covering costs related to tool theft.
Any tradesperson or mechanic that operates tools should consider tool insurance.
Whilst tool insurance is not a legal obligation to have, considering business owners, tradespeople and mechanics are at risk of tool theft, loss or damage – it makes sense to have.
What happens if I don’t have tool insurance?
If you decide that you do not need tool insurance, in the event of any risks causing your tools to be damaged, lost or stolen, you will have to cover the cost of replacing these tools.
Loss of equipment is an expensive inconvenience and replacement costs can eat into profits. If tools are too expensive or difficult to replace, this can cause customers to get disgruntled resulting in cancelled jobs. It could also prevent you from taking on new work until you have replaced or repaired all of the relevant tools you need to do the job.
Depending on the type of work you carry out, the cost of the tools you use can range in price with many being very expensive.
If you don’t want to spend hundreds or even thousands of pounds repairing or replacing construction tools, tool insurance is a great insurance policy to consider.
Our contractors all risk policy covers construction and mechanical tools and equipment. Get a quote here.