Tool insurance

Find out more about making sure your tools are protected in the event of theft or loss.

Key points

  • You can buy standalone tool insurance, or it might come as part of a general business insurance policy
  • Consider whether you might be better off self-insuring
  • Make sure the excess isn't so high that it makes claims unviable

Whether you're a builder, plumber, carpenter or dog groomer, tools of the trade are essential.

Tools can be expensive and if they're lost, stolen or damaged, it can have a detrimental effect on your business.

Not only could you have to pay to replace them, but if you don't have any tools you may have to turn away essential custom.

Whether you store your tools in a workshop or at home, it's important to make sure you have the right cover for them.

Workman's helmet and gogglesSpecialist tool cover

Tool insurance will cover you in the event your tools are lost, stolen and possibly damaged.

Although it's possible to buy dedicated tool insurance policies, it can come as part of your business insurance, or you might be able to add it as an optional extra.

Whether it's cheaper to buy it separately or to add it to your business insurance policy will depend on your own circumstances, so shop around and check the options available.

Keep your tools safe

  • Keep items hidden from view and make sure your vehicle is alarmed and marked clearly.
  • Keep track of your equipment - make sure you know what you have, and keep receipts for big purchases
  • Consider fitting security to your home or storage facility to protect against burglaries
  • Think about having expensive tools and equipment marked with invisible pen or security marking systems – it’ll increase your chances of getting them back if they are stolen

To ensure you have the right cover for your tools, you can add up their collective value or list the particularly expensive ones individually on your policy.

Specialist business insurance policies like tradesman insurance can provide tailored cover for whatever you need, whether that's cover for your stock, business equipment or tools. 

Before taking out tool insurance, check the policy terms and conditions of any cover you already have. 

You may already have cover under a business or home insurance policy in the event your tools or stolen, lost or broken, and you don't want to double up on cover so it's important to check.

Why do I need tool insurance?

Consider whether you could manage if your tools were lost or stolen - do you have a back-up set, or someone whose tools you could borrow?

Tool insurance may not be essential if you're willing to self-insure against the possibility of losing them.

Self-insurance simply means putting away money each month to cover the unforeseen - just make sure you don't forget.

There's also the risk that something could happen to your tools before you've built up a healthy reserve fund to replace them.

Optional extras

There are a number of additional features a tool insurance policy could include.Beginners' guide to business insurance

Personal use

Some policies cover loss, theft or damage caused to tools while using them in a personal capacity.

Overnight cover

Taking out tool insurance doesn't mean you should stop looking after your tools.

Some policies may cover theft from an unattended vehicle, but it's best to remove your tools from your car or van overnight.

Your car insurance or van insurance may cover for stolen possessions up to a certain amount, but it may not offer cover for goods used in business. Get in touch with your provider to find out.

Think about the excess

When looking for a tool insurance policy, remember to check that the excess isn't too high.

If you have to pay an excess of, say, £100 to make a claim - more than the lost or damaged tool - it may make the policy itself pointless.

By Emily Bater