Tools and equipment insurance cost

Small businesses pay an average premium of $14 per month, or about $170 annually, for tools and equipment insurance.

Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.

Here are a few factors that your insurance provider will consider when determining your premium for a tool insurance policy:

A tools and equipment policy is property coverage for newer items valued at $10,000 or less. It's designed for items that are stored offsite or that travel to job sites, such as hand tools, power tools, saws, computer equipment, laptops, etc. Generally, the cost of your policy depends on the value of the items that you wish to insure, including rented equipment.

Your coverage limit should match the value of the items you are insuring to guarantee you don’t end up paying for property damage out of pocket. Mobile items valued at more than $10,000, such as bulldozers, excavators, backhoes, and other heavy equipment, will require inland marine insurance coverage.

When buying property insurance, you can choose to cover your property for its replacement cost or its actual cash value. Replacement value coverage costs more because it pays for the purchase of a brand-new replacement item. You can save money with actual cash value coverage, which instead covers the damaged equipment's depreciated value.

An equipment policy that covers open perils will cost more than a policy that covers named perils. Open perils coverage protects against all losses, except those specifically excluded in the policy. Named perils coverage only protects against losses listed in the policy.

Typically, tools and equipment insurance covers fires, vandalism, theft, and hail damage. Exclusions may include wear and tear damage, earthquakes, floods, equipment breakdown, and vehicle damage. These exclusions can often be covered by commercial property insurance, auto insurance, and specific coverage endorsements.

Insurance providers will assess how safe your items are when determining your premium. For example, office equipment stored at a secure offsite location will cost less to insure than employee tools stored at a construction project in an area of high crime.

Additionally, insurers may look at how often the items are moved, as well as safety features like sprinkler systems and burglar alarms.

Insurance companies will also look at your industry and profession when determining the cost of any type of commercial property insurance. Small businesses in professions with higher risks and more frequent property claims can expect to pay more for this coverage.

For example, cleaning businesses pay an average of $38 per month for tools and equipment coverage, as they may face a higher risk of damaged or stolen items at a client's premises. General contractors and construction businesses, on the other hand, pay an average of only $14 per month for this policy.

The graph below illustrates how your type of business can affect the premium:

Many small business owners opt for a business owner's policy (BOP) or commercial package policy (CPP), which combines commercial property insurance with general liability coverage at a lower rate than purchasing each policy separately.

When you buy a property and heavy equipment policy, you can choose to pay your premium in monthly installments or annually. Insurers usually offer a discount when you pay the full annual premium.

Insurers will consider your claims history when setting your premium. Risk management helps you avoid claims and keep your premium low. That includes choosing a secure site to store your pieces of equipment, or installing a burglar alarm on a van or truck.

Opting for lower limits or a higher deductible is an easy way to save money on your premium. However, be sure to choose a deductible you can easily afford. If you can’t pay your deducible, you can’t collect on a claim.

Insureon is the #1 independent agency for online delivery of small business insurance. We help business owners compare quotes from top-rated providers, buy policies, and manage their coverage online.

By completing Insureon’s easy online application today, you can get free quotes for property insurance and other insurance products from top-rated U.S. insurance companies.

Once you find the right policy, you can begin coverage in less than 24 hours and get a certificate of insurance. Our licensed insurance agents can answer any questions and will help make sure you're fully protected.

Insurance premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for a specific policy.