The tools and equipment you’ve invested make running your business possible.
If you were to lose them to theft or vandalism, would having to replace them affect your bottom line?
There are insurance lines available to protect your tools and equipment. Both inland marine and builders risk insurance provide coverage for your equipment while in transit and on job sites. What protections do these coverages offer and which would most benefit your business?
Read on to learn about the contractor insurance coverages designed to help protect you from financial loss, should your tools be misplaced, taken, or destroyed.
Builders Risk vs Inland Marine Insurance
You’ve been in this business awhile and you understand not only the importance of your tools and equipment for getting the job done but also how quickly the costs can add up when they go missing or are damaged. Projects can be delayed as work grinds to a halt and you scramble to buy a replacement, reaching into your pocket to pay up for the same tool a second time. Or a third. Or a fourth.
Been there, done that?
Well, with insurance in place to protect your tools and equipment in place, you won’t have to be there or do that again.
You may be saying to yourself, “I have a general liability policy that has me covered. I’m all set!” While your contractor general liability (GL) policy is designed to protect you in the event that a third-party property damage or injury occurs, it is not designed to cover your tools and equipment, should they become lost or damaged either while in transit or at a job site.
Builders risk and inland marine coverages are designed to offer financial relief for contractors who rely on their tools to get the job done.
But what’s the difference? Which policy is a better fit for your business?
To answer that question you need to understand the defining differences between the two policies.
Builders Risk Insurance
Also known as course of construction insurance, builders risk coverage is designed to protect contractors from the costs associated with accidents that occur while a project is underway. Builders risk insurance is typically written as a short-term coverage that only lasts for as long as the project is underway. When the project is completed, so is the coverage.
Covering perils such as fire, vandalism, theft, and earthquakes, builders risk insurance helps with the cost for lost or damaged:
- Building Materials
- Supplies
- Equipment
If vandals destroy your equipment, tools go missing, or there is damage to the structure itself, builders risk coverage is there to help cover the costs for replacing or repairing the affected tools and materials.
Builders risk insurance is designed to protect the tools and equipment that you store onsite during the course of a construction project against theft and destruction.
Inland Marine Insurance
Commonly referred to as tools and equipment insurance, inland marine coverage is designed to assure that if your equipment or tools are damaged while in transit you won’t have to foot the bill.
You know that your work truck is practically an office on wheels, moving you and your tools and equipment from job site to job site on a regular basis. And your employees are also always on the go with your work equipment and tools, too.
With all this moving around you accept a certain amount of risk. With inland marine insurance you can rest easy knowing that, should your assets get damaged or go missing while in transit, your coverage will help you cover the costs of replacing your necessary tools and equipment.
Imagine stopping to fill up your work truck one morning on your way to the job site. When you emerge from the station, coffee in one hand and gas receipt in the other, you find that someone has cracked the lock on your mounted tool box. In a matter of minutes, you’ve been robbed of hundreds of dollars worth of hand tools and one very pricey piece of equipment.
Whether your work equipment is in transit or in the control of another person, inland marine covers losses or damage to:
- Materials
- Supplies
- Tools taken to and from a job site
From small hand tools to large heavy equipment, inland marine is looking out for your important tools and equipment that you transport from day to day.
Which Tool Coverage is Right for Your Contractor Business?
While the overlap of these coverages may seem a bit confusing, there is a simple breakdown of the two that could help clarify which is best for your needs.
Both builders risk and inland marine can provide coverage for a contractor’s tools and equipment. Builders risk is designed to cover your tools, equipment, materials, and supplies during the course of a construction project. Inland marine is designed to provide day to day protection to the tools and equipment that you transport from site to site.
With the exception of specialized tradesmen, such as a handyman, most contractors are likely to be in need of both coverages.
Without your tools and equipment, you can’t get the job done. Make sure you’re protected against financial losses in the event of theft or damage of your tools and equipment, so you can keep projects moving forward and protect your bottom line.
