Tool Insurance: What's Covered and What Isn't

‍‌‌​​​​​​​​‌‌​‌​‌‌​​‌‌​​‌​‌‌​‌​‍SiteKiln gives you plain-English information, not personal insurance, financial or legal advice. If you need advice specific to your situation, talk to a qualified insurance broker.

6.4.1 The short version

Tools and plant insurance covers the cost of replacing or repairing your gear if it is stolen, lost or damaged -- including owned kit and, if added, hired-in plant. You can buy it as a standalone "tools/plant" section or bolted onto a van or business policy; the big differences are usually in limits, where items are covered, and overnight security conditions.

Van policies are often cheap add-ons with low limits and tough "no cover if left in the van overnight" rules. A proper tools and plant policy is built for contractors -- higher limits, cover on site and in transit, and options for owned and hired-in plant, but at a higher premium.

6.4.2 Why it matters

Your tools and plant are basically your income. Lose a van full of kit or a stolen mini-digger and you are not just out the replacement cost -- you are also losing days or weeks of work and reputation while you sort it out. A lot of small firms only find out their "tools covered" box on the van policy was almost useless after a theft.

Plant hire is similar. Under standard CPA/HAE hire conditions, you are on the hook if hired plant is stolen or damaged -- often for the full replacement value plus continuing hire charges while it is off the road. One uninsured digger theft or damaged telehandler can wipe out the profit from a whole job.

6.4.3 What tools and plant insurance actually covers

Specialist tools/plant policies for contractors usually cover:

• Owned tools and small plant -- against theft, accidental damage, fire and similar risks.
• Owned large plant -- excavators, dumpers, access platforms and other machinery.
• Hired-in plant -- your legal liability under the hire agreement if hired kit is damaged or stolen, plus continuing hire charges.
• Equipment on site, in secure storage and in transit (often anywhere in the UK, sometimes wider).

Common extras or extensions:

• New-for-old on newer plant and tools, up to a certain age.
• Cover while plant is being moved between sites, including on low-loaders.
• Cost of recovering immobilised or stuck plant.

What it does not usually cover:

• Wear and tear or mechanical breakdown on its own (some "machinery breakdown" sections exist but they are separate).
• Tools left unattended with no security at all or sites with no basic security measures.
• Items not declared or badly under-insured compared to their true replacement value.

6.4.4 Standalone tools/plant vs van policy add-on

You will see two main approaches:

• A standalone or "contractors' plant and tools" policy (sometimes under a contractors/all-risks or commercial combined policy).
• A tools add-on bolted to your van insurance.

Typical differences:

If your kit is worth more than a couple of grand, or you use hired-in plant regularly, a dedicated tools/plant section is usually the grown-up option. The van add-on is better than nothing but do not rely on it without reading the overnight/theft wording.

6.4.5 Hired-in plant -- why it is its own issue

Hired-in plant insurance sits in the same family but is slightly different.

Standard CPA/HAE terms put the risk on you as the hirer -- if the plant is stolen, damaged or destroyed, you must pay for:

• Repair or full replacement (at current value, not what you think it is worth).
• Continuing hire charges while the plant is off hire, often up to a set number of weeks.

A hired-in plant section or policy will usually cover:

• Your legal liability for loss or damage to the plant.
• Continuing hire charges for an agreed period.
• Sometimes legal costs if there is a dispute.

One-off HIP policies exist for short hires, but most regular hirers are better on an annual blanket limit. You will normally be asked to pick a total hired-in value (for example "up to £100k at any one time") so the insurer can price the risk.

6.4.6 Common exclusions and gotchas

Whether it is a van add-on or a standalone plant policy, watch for these:

• "No cover for theft from a vehicle overnight unless the vehicle is in a locked building or compound."
• Lower limits or no cover at all for tools left in a van between certain hours (often 9pm-6am).
• No cover for borrowed/loaned kit -- some HIP policies only cover plant hired under a formal agreement, not "mate's digger" arrangements.
• Under-insurance -- if you insure £10k of tools but really have £20k, some policies will only pay a proportion of any claim.
• Exclusions for particular types of plant, high-risk locations or poor security (no fencing, no locks, no tracking).

For larger plant policies, also check:

• Whether breakdown is included or excluded -- often it is a separate section.
• Whether plant is covered while hired out to others, not just when you use it yourself.

6.4.7 Quick tools and plant health check

You are in a better place on tools and plant if you can tick off most of these:

You know roughly what your tools and small plant would cost to replace tomorrow, and your sum insured matches that.

You have specific cover for hired-in plant (either on your main policy or via HIP) if you ever hire in diggers, access, welfare or similar.

You have read and are actually following the overnight and site security conditions on your policy.

You are not just relying on a cheap van add-on for tens of thousands of pounds of kit.

If any of those are a "no", that is your to-do list before the next theft story in the group chat is yours.

6.4.8 What to do next

• Work out the realistic replacement cost of all your tools and small plant -- your sum insured must match.
• Check whether your current policy is a proper standalone tools/plant cover or just a cheap van add-on with low limits.
• Read the overnight security and theft conditions on your policy and make sure you are actually following them.
• If you hire in plant regularly, check you have hired-in plant cover that matches CPA/HAE hire terms.

6.4.9 Who to contact

• Your insurance broker -- to review sums insured, policy type and hired-in plant cover (paid)
• FCA Financial Services Register -- fca.org.uk/firms/financial-services-register -- to check your insurer or broker is authorised (free)
• Financial Ombudsman Service -- 0800 023 4567, financial-ombudsman.org.uk -- if you have a complaint about your insurer (free)
• ABI (Association of British Insurers) -- abi.org.uk -- general insurance guidance (free)
• Citizens Advice -- citizensadvice.org.uk -- for general guidance on your rights (free)

6.4.10 Sources and legislation

• Consumer Insurance (Disclosure and Representations) Act 2012 -- disclosure duties when arranging insurance. legislation.gov.uk/ukpga/2012/6
• Third Parties (Rights against Insurers) Act 2010 -- third-party rights in insolvency situations. legislation.gov.uk/ukpga/2010/10
• Road Traffic Act 1988 -- van insurance requirements relevant to tool storage and transit. legislation.gov.uk/ukpga/1988/52

6.4.11 Related guides on this site

• 6.1 Public liability insurance
• 6.5 Contract works / all risks insurance
• 6.9 Making an insurance claim
• 12.1 Why tool theft matters now
• 12.3 Locking down vans and sites
• 15.11 Tools of the trade

Common questions

Will insurance cover stolen tools from van?

Only if you have a specific Tools-in-Transit policy. Standard van insurance does not cover the contents. Most tool policies also exclude theft from an unattended vehicle overnight. Read the small print: most insurers require the van locked, alarmed, and parked off-street between 9pm and 6am.

Tool Insurance guide.

How do I prove what tools were stolen?

Keep a current inventory with photos, serial numbers, purchase receipts, and approximate value. Insurers will not pay out for items you cannot prove you owned. Use a Plant & Equipment Register and store a copy off-site (cloud, email). Update it every time you buy or replace a tool.

Equipment Register tool.

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