Are Your Tools & Equipment Covered?
One of the most common misunderstandings regarding a commercial policy is that the equipment and tools used in the daily operations are automatically covered if a loss occurs. The Erie commercial line policies require that this coverage be purchased separately or added to the policy. The tools and equipment are rated by classification such as powered & non-powered hand tools, powered & nonpowered equipment and contractors equipment. The powered & non-powered hand tools include drills, saws, wrenches, hammers, etc.
These tools are usually grouped together and insured on a combined value, and not separately, due to the low value of each tool. The powered & non-powered equipment includes scaffolding, forklifts, generators, lawnmowers, etc. This equipment can be grouped together, like the hand tools, or each item can be listed separately at the stated value. Erie requires that the higher valued items be listed separately. Then, there is the contractors’ equipment. Contractors’ equipment includes rollers, backhoes, pavers, bulldozers, etc.
This coverage is designed to cover mobile equipment used in construction. Because of the higher value, each piece of equipment is required to be listed separately on the policy at its stated valued. There are other items that are used daily which also are required to be listed separately on the policy such as electronic equipment and higher valued computer equipment.
Many businesses use two-way radios as a means of communications from their home base to each construction job site or they may purchase cellular phones for their employees. These items would be insured on a combined value. Most businesses also own a computer system whether it’s just one computer or numerous computer stations throughout their office.
This coverage is especially important since there is information vital to your daily business operations such as accounting records and inventory. The computer equipment would also be insured on a combined value. If you already have tools & equipment coverage listed on your policy, it is essential that you keep your records up to date by either adding new equipment and increasing your tools coverage or deleting equipment and lowering the coverage limit.
Numerous times, the insured waits to add the coverage after a loss has occurred only to find out that he/she could have saved their company an unnecessary expense if this coverage would have been purchased. So if you or your company need the tools and equipment coverage or you have purchased new items, please contact our agency. And you can relax knowing that your business is covered the way it should be. After all, isn’t that why you purchase insurance?
by: Jay Farnham