Tool insurance

Tools cover may be a section of a wider policy or a separate arrangement. The product name alone does not establish its scope.

Sole traders, businesses with staff and tradespeople working across sites may have different items and responsibilities to check. These are examples of who may consider it, not a guarantee every trade is accepted.

Tools cover is a different question from employee injury claims, liability to customers, vehicle cover or lost income. Check any hire or contract requirements too. The tradesperson insurance guide covers wider package choices.

List the actual items and who owns or is responsible for them. Possessing tools or being responsible for them under a contract is not necessarily the same as owning them.

Item or responsibility	What to establish
Hand and power tools	Whether the definition includes your items and accessories.
Specialist or testing equipment	Category covered, value and any need to list an item separately.
Employee-owned tools	Whether they are included and whether limits apply per person.
Hired or borrowed tools	Whose ownership or financial responsibility is covered under the agreement.
Financed items	Ownership or financial interest and how the provider wants them recorded.
Electronics, machinery (plant) and materials	Whether they belong in tools cover, another section or a separate arrangement.

This checklist does not confirm every item is available or covered. Do not assume a laptop, digger or consumable counts as a tool under every wording. Ask for the definition applicable to your items where unclear.

Check causes of loss separately from where the tools are used or kept.

Events: Ask about theft, fire, flood, accidental damage and loss. Accidental damage differs from wear or breakdown. Loss does not automatically include unexplained disappearance. Check definitions, exceptions and evidence requirements for the actual cause.

Locations and handling: Check premises, sites, temporary storage, vehicles, transit and loading. Ask about away-from-premises cover, territories and any location, security or handling restrictions.

A policy covering the van does not automatically include work tools. Check whether van insurance covers tools.

Some policies can cover tools kept in a van overnight, subject to their storage and security conditions. A locked van alone does not confirm cover.

Check the actual policy’s requirements for:

• unattended/overnight definitions and any specified hours;
• parking and storage locations;
• concealment, locks, alarms and other security measures;
• evidence of entry or security measures, where required;
• any separate excess, the amount you must contribute to a claim.

These are possible checks, not standard requirements for every insurer.

Hypothetical example: An electrician keeps tools in the van between jobs and overnight at home. Describe the routine, van and parking location, then ask whether the terms fit. The example does not determine cover.

If the terms do not match your routine, ask what cover or storage changes can be agreed. A generic security upgrade does not automatically resolve other conditions. Taking tools indoors does not itself establish home-insurance cover.

The tools stolen from a van guide covers response steps for an existing theft.

Total value and your highest-value item

Ask how values must be calculated for the policy, the valuation basis. Prepare the total on that basis and identify your highest-value items. Compare these with any single-item, per-person, per-event or shared-period limits. A total limit may be high enough for all your tools while a single-item limit is too low for one expensive item.

Also ask whether a separate limit applies to tools in one vehicle, at one site or in one storage location, and compare it with the value that may be together there.

Hypothetical example: A plumber uses a high-value diagnostic tool alongside everyday hand tools. Ask whether its value fits the single-item limit or whether it must be listed separately.

Repair, replacement and age deductions

Invoice price, current second-hand value and the cost of a new equivalent can differ. Check which basis the provider requires for your declaration and how claims would be settled.

Ask whether the insurer repairs, replaces or pays cash. What deductions apply for age or condition? Is there an adjustment for improvement over the previous item?

Replacement with a new equivalent (often called new-for-old) has conditions. It does not promise an identical replacement or payment for every loss. Ask how recoverable VAT affects settlement where relevant.

Excesses and the basis of limits

An excess is the amount your business must pay towards a claim where the policy requires it. A limit is the maximum payable on the policy’s specified basis. Check how each applies to the item and event, including any special vehicle terms.

Check for a total shared across claims during a specified period, called an aggregate limit. Ask how any provision restoring cover after use operates. Do not assume an automatic reset. The limits and excesses guide explains these checks.

Read the definitions, exclusions, exceptions and conditions governing the items, events and locations above. Endorsements (documents changing the policy terms) can alter the position. The earlier checks are not a universal exclusion list.

A tools-in-transit policy, package section and standalone product need not operate alike. Do not infer all-risks cover, reimbursement of hire charges or replacement of lost earnings from the name alone.

Use the actual wording/version, schedule and endorsements together. Ask the provider which terms apply if documents conflict. If a summary is silent, record “not stated; ask” and obtain clarification. The exclusions guide covers document reading in more detail.

Different routes exist, but availability and purchase requirements depend on the provider, product and activities. A wider package does not automatically include tools or every employee’s equipment.

Check which sections are selected, whether separate tools cover is available and whether the provider requires public liability or another cover alongside it.

Compare the terms rather than assuming a package is always cheaper or more complete. Use the tradesperson guide linked above for wider package evaluation.

Prepare these details for a quote:

• work and activities;
• tools and values;
• storage, use and transport;
• selected cover and excess;
• history requested by the provider.

These are preparation prompts, not a universal pricing formula. A wider business-package premium is not a tools-only price. Compare the actual total payable and payment terms. The tool insurance cost guide covers pricing and payment questions.

Use this item inventory for the provider discussion. Add one row per item, use the requested values and label estimates. Check whether particular items must be listed separately in the policy.

Item and owner/responsibility	Where used or stored	Value	Valuation date	Basis used	Questions to resolve

Record the overall total and highest-value items separately. Compare any vehicle, site or storage-location limit with the tools that may be together there.

Also prepare:

• the correct business identity and all activities;
• ownership and contractual responsibilities;
• total and individual values;
• sites, transit, storage and overnight routine;
• existing insurance and requested claims history.

Use the multiple-trades guide for mixed activities. Describe work accurately rather than choosing an inaccurate trade to fit a form.

When arranging business insurance, fair presentation can require more than answering application questions. Disclose material information your business knows or ought to know. Ask the insurer or broker if you are unsure what to provide.

Existing policy: Ask its provider to clarify the tools, locations and terms involved.

Future cover: Check the proposed items, events, security, settlement, limits and excesses alongside price. Obtain clarification on unresolved points. A quote, request or acknowledgement does not confirm active cover or an agreed change.

Actual loss: Follow claims instructions promptly. Preserve relevant evidence where safe and ask about inspection, repairs or disposal before non-urgent action that could affect assessment. Do not delay emergency protection or keep damaged equipment somewhere unsafe.

Do not send inventories or confidential documents to Clearcut.