Tools are the most frequently stolen asset a contractor owns and the most commonly under-insured. The cover itself is straightforward; the conditions attached to it are where claims are won and lost.
How the Cover Is Structured
Tools of trade is usually a section within a business insurance package or a tradies package. Two numbers define it:
- The total sum insured — the most payable in one event.
- The per-item limit — the most payable for any single tool unless it is specified separately.
That second number is what catches people. A total of $20,000 with a $2,000 per-item limit will not replace a $6,500 laser level unless that level is listed individually.
The Unattended Vehicle Condition
Almost every wording requires that a vehicle be locked and, in many cases, that tools be in a locked toolbox or the vehicle be garaged overnight. Some restrict cover between certain hours. Theft from an open tray or an unlocked canopy is the single most common declined tool claim.
Theft From Site
Cover for tools left on site is often narrower than cover for tools in a vehicle. Many policies require forcible entry to a locked building, container or compound. Tools left in a partly built structure overnight may not be covered at all — worth checking before the job, not after.
What Is Usually Excluded
- Mysterious disappearance, where there is no evidence of theft.
- Wear, tear and mechanical failure.
- Tools left in the open on site.
- Hired-in tools, unless hired-in plant cover is added.
- Employees’ own tools, unless specifically included.
The Paperwork That Gets Claims Paid
- Keep a tool register. Make, model, serial number, purchase date, price.
- Photograph the kit. A phone album of the trailer and toolboxes takes five minutes.
- Keep receipts, even as photos.
- Report thefts to police immediately and keep the event number.
- Review the sum insured annually. Tool prices have risen sharply; a schedule from three years ago is not current.
Related Cover Worth Considering
- Trailer cover, where tools live in a trailer — see trailer insurance.
- Portable plant for larger items: compactors, generators, saws.
- Public liability, which remains the cover that protects the business rather than the kit — see public liability insurance.
How Much Cover Do You Actually Need?
Most contractors underestimate their kit by a wide margin, because they price the tools they think about rather than the tools they own. A useful exercise: walk out to the vehicle and photograph every drawer, box and shelf, then price replacements at current retail. Battery platforms, in particular, have grown expensive — a full set of tools, batteries and chargers across two brands adds up quickly.
Add the items that are easy to forget: laser levels, test equipment, generators, compactors, ladders, extension leads, and the toolbox itself.
Specified vs Unspecified Items
Anything worth more than the per-item limit needs to be specified individually, with a description and value. Specifying costs a little more and removes the argument entirely. Unspecified cover is fine for the long tail of hand tools where no single item exceeds the cap.
Reducing the Risk Rather Than Just Insuring It
- Fit a quality lock and an alarm to the trailer or canopy — most site thefts are opportunistic.
- Do not leave tools in the vehicle overnight where you can avoid it.
- Mark tools with an engraved business identifier; marked tools are harder to sell and easier to recover.
- Register serial numbers, which is what allows police to return recovered gear.
- Vary where you park if you work in the same area for weeks.
After a Theft: the First Two Hours
- Report to police and record the event number — most policies require it.
- Photograph the point of entry and the damage.
- Notify your broker the same day.
- Send through the tool register and any receipts you hold.
- Check local marketplaces over the following days; recovered tools are frequently listed within a week.
Common Questions
Are my tools covered by my home contents policy?
Business tools are usually excluded or heavily limited on a domestic policy. Do not rely on it.
Is it new-for-old?
Some policies replace new, others pay depreciated value. Ask, because it changes what a full replacement actually costs you.
What about tools in a locked toolbox on an unlocked ute?
Often acceptable, provided the toolbox itself is locked and shows forced entry. The wording decides it.
Talk It Through
Request a quote or call 1300 983 940 and we will check the limits against what is actually in your vehicle.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.