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IPS / Lighthouse Insurance Group Blog: contractors equipment

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Small ToolsTools and equipment are key to the success of contractors of all types.  Whether you work in construction, service and repair, lawn maintenance or pest control, you could quickly be out of business if you were suddenly without the tools that enable you to do your work.  Should you suffer a loss, proper insurance covering your tools and equipment can mean the difference between being back in business quickly and being forced to close your business.

Insurance for contractor's tools and equipment is easy to obtain.  Most often, it is added to a commercial package policy along with the contractor's other lines of insurance, but it can be purchased on a stand-alone policy as well.  This type of coverage falls under a broad category of insurance called Inland Marine.  Most types of inland marine insurance are intended to provide coverage for items that move from place to place - it doesn't restrict coverage to a specified location like other forms of property insurance.  This means that tools and equipment covered by this type of insurance will be covered whether at your place of business, while traveling in a vehicle, at a job site, or most anywhere else subject, of course, to territorial limitations in the policy.

Tools and equipment can be covered as scheduled or unscheduled.  

The unscheduled form is generally for smaller items valued up to $1,000 per item.  A limit of insurance is chosen to cover all of these items on a blanket basis without the need to list everything.  Depending on the type of policy, the limit of insurance needs to be high enough to REPLACE all of your small tools, or to completely cover their ACTUAL CASH VALUE.  

The scheduled form is generally for larger items valued at $1,000 or more per item, such as generators, riding mowers, excavators, bulldozers, and the like.  Scheduling these items simply means that the policy will individually list each covered item on a schedule describing the item and the value it is insured for.  

A single policy may include both scheduled and unscheduled items. Most insurance companies have a minimum deductible of $500 and most policies stipulate that coverage for theft does not apply if items are stolen from an unlocked, unattended vehicle.  In other words, items must be locked and protected at all times in order for insurance to apply.

Important things to keep in mind when it comes to your tools and equipment: 

  • Don't rely on homeowner's insurance to cover business property.  At best, most homeowner policies offer only a small amount of coverage for property owned or used by a business and it is often limited to loss that occurs on the home premises.
  • Keep good records of all items.  Any time a claim is made for loss to property, the insured person or business must substantiate the fact (prove) that the items existed.  Receipts are best the best proof, but manuals, photos or other documents can be very helpful as well.
  • Make a police report right away if you suspect your loss is caused by a crime (vandalism, theft, etc.).

    For more information on insurance for Contractor's Tools and Equipment Contact us at 800-220-5582, visit the CONTRACTORS INSURANCE page on our website, or contact us online.
  • More Info

    Contractors Equipment

    If you’re making final preparations before your company’s busy time of year this spring or summer, it’s the perfect time to evaluate your current insurance coverage.  Columbus, Ohio-based Grange Insurance offers four important considerations for seasonal employers to address before business starts to peak.

    1. Am I planning to hire any seasonal employees?
    Landscaping companies, construction companies and several others hire millions of seasonal workers each spring and summer. If you’re planning to hire any seasonal employees, including teens, be sure to minimize your risk and properly train all of them on necessary safety procedures. These procedures may include steps to avoid injury and damage to company property.
    Review your workers compensation insurance with your agent to be sure that payroll estimates are up to date.

    2. Have I purchased any new equipment within the last year?
    This may seem like a simple question, but often when people purchase new equipment at the end of a season, they forget to secure the appropriate insurance coverage for these items. After you’ve confirmed these new pieces of equipment are insured, also check to make sure the coverage you do have has relevant limits.  Talk with your independent agent if you are uncertain as to what your policy covers.

    3. Am I planning to bring a vehicle or other piece of equipment out of storage?
    If so, consider taking these vehicles or other pieces heavy equipment to be serviced before you put them back out on the road. Proper service and maintenance can significantly reduce accidents and other safety hazards. And, if any of these vehicles and the tasks they perform are more specialized, you should also double-check with your agent to make sure you’re adequately covered.  Non-traditional equipment like tow trucks, gravel hauling equipment or construction equipment may not be covered under a standard policy.  Discuss your vehicles and any special equipment attached to them with your agent to be sure you have the correct insurance in place.

    4. Have I checked my buildings and various properties for winter damage?
    Early spring is the best time to check any buildings or other structures for winter damage. Consider taking a walk around all your properties in an attempt to locate any roof damage, gutter blockages or any other potentially dangerous situations. If you identify any potential issues, address them with your insurance agent immediately.

    Call your agent at Insurance Planning Service to review your business policy to make sure it includes everything you need for your seasonal businss. Call today at 800-220-5582 or use our online contact form.

    Excerpts courtesy: Grange Insurance newsroom

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    Lighthouse Group Main Office in Grand Rapids, MI
    Mailing Address | P.O. Box 530009, Livonia, MI 48153

    Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

    Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake