Tools and Tips

Tools: In Van Insurance for Contractors

March 8, 2021
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Knowing your tools’ in-van insurance options is vital to your business’ long term success.

The worst problem for contractors is lost, damaged, or stolen tools and equipment. Every year up to $ 1 billion of construction equipment is stolen and less than 10 percent of the equipment is recovered. However, contractors have an option: van-tool insurance. This coverage guarantees you compensation for lost, damaged, or stolen items.

Is van tool insurance worth it?

Tool insurance for vans has a premium, but you're better safe than sorry. Without coverage, recovery of your tools is unlikely, and the consequences of losing tools can extend well beyond the immediate financial headache of replacing or renting tools and snowball into hefty expenses for your small business like missed deadlines, postponed jobs, and even workplace safety issues.

Even if tools are stolen from your home at night or a commercial property, it’s highly unlikely your insurance policies will cover the loss. Typically, both homeowners and commercial property insurance only cover assets that are inside the covered property  — not inside your van or truck or on the move —  and considered personal property. Because tools are usually a business expense, they exist in a grey area most insurers don’t cover. 

Similarly, most general liability coverage doesn’t cover tool loss or damage although you may be able to bundle it with property insurance for BOP, or a business owner's policy. You’ll get a significant discount on property insurance and liability coverage and have your tools covered.

What does van tool insurance cover?

Van tool insurance covers tools you work with on a jobsite - even when they’re being transported. The protection includes tools and equipment vandals at the top site as well as tools missing or stolen out of your van or truck. Your assets are listed two different ways on the policy - unscheduled coverage and scheduled coverage. 

  • Unscheduled coverage is small tools and equipment valued under $1000 per item. 
  • Scheduled coverage is large tools and equipment valued over $1000 or more.

How much is van tool insurance?

It’s best to shop around for insurance for tools and equipment rates that can meet your specific needs. Van tools and equipment insurance can cost $14 per month or $169 per year

For additional coverage, on  loss of income, civil disturbance and vandalism coverage, raise value, earth movement, and flood can cost $395 per year or $30 to $90 per month.

What types of van tool insurance are there?

Contractor’s Tools and Equipment Insurance

Contractor’s Tool and Equipment Insurance is available to businesses with small tools and equipment valued under $10,000 and can typically be added to your commercial property insurance policy or business owner’s policy. This insurance protects mobile tools and equipment less than five years old.

The median premium for contractor’s tools and equipment insurance is $14 per month or $169 per year. However, items valued at more than $10,000 will require Inland Marine Insurance Coverage. 

Inland Marine Insurance

Inland marine insurance is essentially a more robust option and covers van tools worth over $10,000. Unlike commercial property insurance, this has less coverage limits and also covers items being transported from one jobsite to another instead of only covering them while they’re on the commercial property listed. Inland Marine Insurance coverage costs around $250-$10,000/year.

Business Owner’s Policy

A business owner’s policy bundles general liability insurance and commercial property insurance. In addition to covering repair and replacement of tools and other lost or damaged property, it can pay for legal fees during a lawsuit.

To qualify for a BOP, you'll need to have fewer than 100 employees, make less than $1 million a year in revenue.

BOP costs around $99 per month or $1,191 annually for general liability insurance, commercial property insurance, and contractor’s tools and equipment insurance. You can find a list of policies for your specific industry here.

You'll then be asked questions like whether you hold a specialized license, how much of your work is residential vs. commercial work, what percentage of gross annual revenue is derived from the specific types of trade work you do.

From there, an agent will call you to help you pick out the best policy.

How To Get Van Tool Insurance

Your main goal is having insurance for tools and equipment to help protect your investment.

First, identify what you need covered and make a checklist. Policies are created to cover tools that are stolen, go missing, loaned to a crew member, or vandals. Some policies do not cover wear and tear with other common exclusions. 

Second, call and request a quote or go online to get a quote from several van insurance companies. In the risk management process to identify, assess, and control property there are several insurance coverage options to meet your business needs.  

Third, make sure your tools are protected and clearly marked. Many insurance companies set guidelines to approve coverage for tool insurance for vans - like ensuring tools are in the truck inside a locked box with an approved lock.

Tools: In-Van Insurance Options

A few of our favorite picks include:

  • State Farm is the largest U.S. commercial property casualty insurance company which covers mobile tools and equipment. State Farm Commercial Inland Marine insurance is for contractors wanting coverage on hand tools to machinery. 
  • The Travelers Companies, Inc., commonly known as Travelers is the second largest U.S. commercial property casualty insurance company. This insurance company can protect and cover the costs to your repair or stolen property. Travelers Inland Marine also include theft and other options like vandalism, weather, and fires.
  • The Hartford Financial Services Group, Inc., commonly known as The Hartford is a Fortune 500 commercial property casualty insurance company. The commercial inland marine coverage provides protection for movable assets.                 
  • CNA Financial Corporation is the seventh largest U.S. commercial property casualty insurance company. This insurance covers up to $25,000 in theft and recovery.  

Claiming For Stolen Tools

How To File A Police Report

Call your local police department as soon as you notice theft of your tools or equipment. Provide as many details about your asset that was stolen, remember the date, remember how your asset was stolen and who you think might have stolen your asset.  Make sure you get the officer’s name for future details about your stolen property.

Don't forget to get a copy of the police report. A fee for the report is $5. You can get the report at the police station or online. Check periodically with the police to see if your items may be in the property room or any new leads. 

It can also be helpful to check your local pawn shops for tools stolen from vans. If you can prove any of the tools are yours, you might have a chance of getting these tools back through the police and recovering the rest of your items as pawn shops keep records of sellers and copies of their IDs. 

What happens after filing a police report? 

After you contact your insurance company to file your claim, it should take within 30 days. You can check the status of your claim using a mobile app  A claims adjuster works on your case to review the details of the theft and would deny the claim or accept the claim and issue a payment for your loss. 

Insurance companies use a formula to calculate your claim to determine how much you will get. 

Claim = Loss Suffered x Insured Value/Total Cost.

Keeping Records for Van Insurance

When it comes to lost, damaged or stolen tools and equipment, most contractors’ record keeping is poor for van tool insurance claims. Inventory protection from theft takes work in monitoring and locking up tools and equipment. Plus, it’s important to keep track of inventories because they’re an asset and will be on your balance sheet. 

FieldPulse can protect your business against losses by providing an in app inventory as well as eliminating:

  • Paperwork, which can easily get lost and cause headaches as tax season approaches
  • Poor communication that causes inefficiency and costly errors by ensuring consistent work quality from your technicians, so you avoid rework and lost income
  • GPS tracking of employees so you know where your guys - and equipment - are at all times

Easy to use,
easy to customize,
and easy on your wallet.