This insurance protects the tools and equipment used to run your business against:

• Theft
• Loss
• Accidental damage

Cover usually applies while tools are:

• In your vehicle
• On-site
• At temporary locations
• Stored at home

Tool theft is one of the most common claims for tradies and replacement costs can quickly reach tens of thousands of dollars.

Without tools, many businesses cannot operate, resulting in lost productivity and income.

Unspecified Cover

Suitable for general lower-value tools where individual items are not listed.

Specified Cover

Better for high-value or specialised equipment, usually over $2,000–$3,000 per item.

Action Points

• Review the total value of your tools regularly
• Specify expensive or specialised items where required
• Check policy limits and requirements with your insurer or broker

Claims may be denied if policy conditions are not followed.

Common Exclusions include:

• Tools left in unlocked vehicles
• Inadequate security or storage
• Equipment left unsecured on-site
• Wear and tear or gradual deterioration

Policies may pay either:

• Replacement value – replacing tools with equivalent new items
• Indemnity value – reduced value after depreciation

Insurers will usually require proof of ownership when processing claims.

• Keep receipts, serial numbers and photos of equipment
• Maintain an asset register or spreadsheet
• Update your insurer when purchasing new equipment

Hi, and welcome to our episode three mini series. I’m Daniel from Weber Insurance Services, our presentation for Tradie Wives. Before we get started, the usual disclaimer, the information here is just general in nature. We are certainly able and willing to give you personal advice, but that needs to be done in a different forum.

We’re going to cover off tools and equipment insurance today. Just go high level, point out a few issues that we see as well as share some information. So firstly, what is tool and equipment insurance? It’s really cover for the gear that you use to run your business.

Insurance companies sometimes refer to it as general property cover. The idea is it protects you against loss, theft, damage of the equipment that you use, and usually it covers the tools and equipment out and about, so it might be in your ute, it might be at home, a temporary location, on-site, those sorts of things.

The idea being that it’s not covering at a fixed location, it covers the tools wherever you take them. So why do you need it? Well, based on what we see, tool theft is probably one of the most commonly claimed areas for tradies.

I think over time, you accumulate so much in terms of dollars and equipment that you don’t perhaps realise how much it would cost to replace all of it.

We see that equipment replacement costs easily run into the tens of thousands of dollars, and often if you don’t have your tools, you can’t complete your work, you can’t do your job, you’re going to lose days and productivity.

High level claim scenario here. Imagine you’ve got your ute parked at home overnight. I’m sure this is probably hitting close to home for some of you.

Toolbox forced open, window smashed, your tools, laser level, whatever it might be is stolen.

By the time you tally everything up, you’ve lost twenty five thousand dollars worth of gear. So the idea being if you have your tools and equipment insured, this type of thing is covered by that policy. There are two different ways that you can insure this equipment and often that’s driven by the type and value of the equipment. If you’ve got just general tools, relatively low value, generally worth less than say two thousand or three thousand dollars individually, You might do a, an unspecified amount which might say, you know, ten thousand or twenty thousand, but it means you don’t have to actually list everything. You’re just covered for the general, amount and total equipment that you have. If you have some more specialized equipment or if you have values greater than, you know, generally two thousand or three thousand for an individual item, you might want to specify it.

Generally, to specify equipment is a little bit cheaper because the insurer is covering a specific item rather than a series of miscellaneous items. You should get some insurance advice and check your own policy because each one has a separate limit on how they classify. Other things to keep an eye out for are some common exclusions that we see with this type of cover. If your vehicle’s unlocked, a lot of policies will exclude that.

Some policies will include conditions that state the type of locks, the type of security that you have to have on your vehicle, or if it’s at site, it might specify the type of padlock or the strength of a chain that you have or something like that.

A lot of the time the policies will exclude where you’ve just left your tools on-site in what they refer to as open air without being secured in a container or a storage area that can be secured.

Wear and tear is excluded so just age and equipment kind of breaking down or getting old, replacing items that need to be done for general maintenance, that’s also not covered. And the other thing to be mindful of is how your policy actually pays in terms of the limit. Most policies, not all policies, but most policies these days will be on a replacement value which is really important because if you have a piece of kit that’s five years old, you want to be able to go out and buy whatever the newest version of that is to perform a similar role.

Probably more common on contract works policies where you’re insuring tools, you’ll find that you’ll get new for old replacement for the first two or three years of that piece of equipment, and then after that, the insurer will start depreciating it.

So it’s really important that you check your policy to understand if you’ve got replacement value and making sure that that replacement value is enough to get you back to where you were before, or if it’s indemnity value, you understand what the likely outcome is because often you’re going to be getting a lot less than you think the item’s worth. So based on what we’ve looked at and a lot of our clients, average tradie carries in excess of twenty thousand dollars worth of tools.

We know how important tools are to keep your business going.

It takes time to replace things if you’ve got specialised equipment that you maybe can’t get at a local hardware store. It could take times if you’ve got specialised gear that needs to be calibrated or set up specifically for your business, that also takes time.

So if you’ve got the right insurance, getting you back on track quicker means that less downtime.

So you’re ultimately not just insuring the gear but really protecting your income. So I’ll leave you with a few final takeaways. So do you know what your tools are actually worth? Have you done that exercise?

Do you specify items that you need to? Check your policy for what your requirements are.

Do you understand what the limitations are and are you abiding by them? Are you knocking off at Friday afternoon heading to the pub and leaving your gear in the back of your ute, making sure that you’re adhering to all the policy conditions, and have you told your insurer or your broker about new purchases when you’re replacing gear, when you’re updating things? And a big one is do you have receipts or some form of proof of ownership? Because ultimately that’s what you’re going to need when you have a claim. The first thing the insurer asks for is proof of ownership, proof of purchase, photographs, serial numbers to quantify and validate your claim before they settle it to you. So we suggest keeping probably a spreadsheet, an asset register, keeping track of your serial numbers.

You’re probably keeping receipts anyway to pass on to your accountant for things like depreciation, making sure that you keep that on file as much as possible. If you have any questions, reach out to one of the team. We’d be more than happy. Thanks a lot.