Equipment and tools are essential to running a professional business smoothly. However, from time to time, you will need to replace old equipment. You will also need to replace damaged and stolen equipment, and so on, as the case may be. In addition, the nature of the business you run could require expensive items of equipment (e.g., one who runs an equipment rental business) that cost more money to function efficiently, and as such, sufficient coverage and protection (business equipment insurance) for those pieces of equipment are prerequisites. This article is all you need to know about business equipment insurance. Let’s get started!
What Is Business Equipment Insurance?
Business equipment insurance, also known as equipment breakdown insurance, is a necessity in this information age. Thus, to do your job or run your business, be it as a freelance graphic designer with a computer set that costs thousands of pounds, a manufacturer with high-grade machines, a construction contractor, an electrician, a carpenter, or someone who runs cleaning services, if your equipment breaks down, your business will most likely grind to a halt.
With this being said, business equipment insurance is typically a cover that provides your business with coverage for any damaged business tool or equipment, as well as stolen and vandalized tools.
For instance, suppose there was a fire outbreak on the premises where your business activity is being carried out, Business equipment insurance will cover the cost of replacing the equipment itself but not any financial loss sustained in the event.
The question is, Who needs this type of insurance cover?
Who Needs Business Equipment Insurance?
There are no specifics as to who should acquire or obtain business equipment insurance. As long as you have a running business that involves the use of tools, machines, work materials, etc., you will definitely need (as a matter of importance) business equipment insurance.
Hence, the few types of businesses listed below and many more will need business equipment insurance to function.
- Landscaping
- Construction and Contractors
- Cleaning services
- Sports and fitness
- Plumbing business
- Restaurants
- Janitorial services
- Electrical services
- Carpentry services
- Catering/food services
- Event professionals
- Professional services
- Pet services
- Retail stores
- Hair and beauty
- Crafters and makers
Why Is It Essential?
The importance of obtaining business equipment insurance can’t be overemphasized. Since equipment and tools are the livelihoods of a business, it is only necessary to emphasize their importance more.
One major advantage is that it covers payment for damaged, stolen, or vandalized equipment so that you don’t have to pay out of pocket to replace that equipment or tools. In addition, it sets your mind at ease and gives you a sense of confidence in the course of your business activities.
What Does Business Equipment Insurance Cover?
Equipment breakdown, also called equipment insurance, basically covers the following:
- Pays for replacement of malfunctioning or faulty tools or equipment
- Compensation for time and cost used to fix faulty tools and equipment
- Replaces lost business income owing to equipment failure that leads to business interruption
- Covers other costs to reduce losses or get equipment working productively faster.
- Repays for loss of materials or related goods, such as spoiled food, due to equipment shut down (depending on your policy)
- Mandatory supervision or inspection of key equipment
What Business Equipment Insurance Doesn’t Cover
Business equipment insurance covers a lot, except for ordinary wear and tear on equipment and rented equipment. If your equipment develops a fault due to mishandling or bad maintenance, or perhaps, your equipment is already worn out and needs replacement, your insurance will most likely not cover the cost.
Small Business Equipment Insurance
Growing a small business from scratch is undeniably challenging. However, there are so many components that go into making a small business successful, such as having a strong marketing plan, quality customer service, and a great organization system, just to name a few.
Nevertheless, one major thing small business owners should consider is protecting their business for the long haul by having safeguards in place, like business equipment insurance. This goes a long way in protecting tools and equipment wherever they are stored and pays for repairs or replacement if they are lost, damaged, or stolen.
Needless to say, you should keep in mind that business equipment insurance and coverages are subject to limits and deductibles, whether you are a small or large business. However, you have the liberty to choose equipment coverage limits based on the estimated cost to repair or replace your small business equipment and tools.
Furthermore, if your business suffers more losses than the coverage limit chosen by you, you will have to pay out of pocket for further repairs and replacements. Also, know that purchasing insufficient coverage limits will attract a fine penalty. Hence, you must ensure to get enough insurance to cover your business, no matter how small it may seem.
Business Equipment Insurance Cost
Tools and equipment insurance is offered as an addition to the general liability insurance policy. Simply select the coverage level that’s right for your business when you apply for a quote online.
Basic tools and equipment coverage can start at £11.19 a month. A-Pro policy starts at £21.67 a month, or choose a Pro Plus policy for £40.30 a month.
Some jobs or businesses require more expensive equipment or tools than others. Some insurance companies offer three types of business Equipment Protection coverage limits. Nevertheless, the cost of insurance varies distinctively and totally depends on where you work and live, and how much you have in your budget for an insurance plan.
However, the cost of insurance is much less than replacing a piece of business equipment or tool, so as earlier suggested, you will need to apply for a quote online from any insurance company or insurer to select the coverage that best fits your business type and to also find out the actual price that coverage goes for.
Business Equipment Insurance Companies
Below are some of the top insurance companies you can look out for to know what their offers are like:
- AXA
- AXA XL
- Aviva
- Arthur J. Gallagher
- Dinghy UK limited
- Adler Insurance
- Admiral
- Adrian Flux
- AXIS Capital
- Barbican
- Be Wiser
- Beazley
- Beech Underwriting
- Berkley
- Bizcover
- Markel
- Simply Business
- Towergate underwriting
- Uk insurance
- Zurich
- Uk general
- Willis Towers Watson etc
Equipment Rental Business Insurance
Every business comes with its own unique risks and vulnerabilities. In owning or running an equipment rental business, you can be sure that your business is at a high liability risk, either of facing claims of damaged property to customers or other people injury to customers or clients or legal claims against your business regarding product/services rendered by your business and the list goes on.
Hence it is important to understand the need to have your business covered with the right policy just in case any crisis should arise. For starters, you will need several basic business insurance policies like we will be discussing below.
Basic Business Insurance Policies Your Equipment Rental Business Needs.
Like already pointed out before any business faces risks that should be covered by insurance regardless of the industry or company that it is. Here are a few that should be considered
#1. General liability insurance
This is the most common and comprehensive type of policy most business owners invest in. it provides coverage if you or your staff members are responsible for property damage and bodily injuries to either clients or other people. This policy also covers medical payments such as slip and fall claims and legal defense and judgment
#2. Property insurance
This policy covers three significant things. Which are:
- Firstly, It covers your real property if you own your building
- Secondly, covers your building contents, other than rental items
- Finally, it covers your rental items.
#3. Commercial Auto
Your equipment business will definitely need a truck or service vehicle to transport rented equipment to customers because accidents could occur at any time and could be costly to pay out of pocket.
Thus, this policy covers collision damage, rental reimbursement, medical payment, and bodily injury. If the driver doesn’t have as much liability insurance to cover the bills from the accident, this policy can as well cover for that too
#4 Workers Compensation
This policy is mandated by the state and provides financial compensation to employees due to work-related illness and injuries.
You will need this policy and several others to manage your risks properly as an equipment rental business or company.
#5. Inland Marine Policy or Floater
This policy is also known as a floater. This policy is almost similar to commercial auto but provides way broader protection. Commercial auto won’t cover what inland marine will cover. Because your equipment would be moving from location to location, you might want to consider this policy especially if your rental company is large scale. As it is being transported, it is at a high risk of getting damaged or lost. Thus, this rental equipment insurance will cover the repair or replacement of any property on transit.
How Much Does Equipment Rental Business Insurance Cost?
By now you would be wondering how much equipment rental business insurance should cost, yeah you are!
Well, there’s no specific amount placed as different insurance companies offer different rates. In other words, the price varies based on the company, and the type of policy needed to cover your business. The following below is just a rough estimate of possible prices of different policies
General liability insurance is very essential and could cost £355 – £450 annually.
To protect the liability risks Professional Liability insurance is required, which could cost up to £2,664 per year.
While driving your rental equipment to and from clients, you´ll need Commercial Auto insurance, which would cost up to £1,687annually.
Conclusion
Conclusively, business equipment insurance, also known as equipment breakdown insurance, is a necessary type of business insurance. To do your job or run your business smoothly and steadily be it as a freelancer, manufacturer, or as an equipment rental business, you must ensure having a business equipment insurance in place.
While it guarantees protection against business interruptions. It also guarantees your peace of mind and gives you a sense of confidence in the course of your business activity.
FAQs
what is business equipment insurance?
business equipment insurance is typically a cover that provides your business with coverage for any damaged business tool or equipment, stolen and vandalized tools
how much does business equipment insurance cost?
Basic tools and equipment coverage can start at £11.19 a month. A-Pro policy starts at £21.67 a month, or choose a Pro Plus policy for £40.30 a month.
what is equipment rental business insurance?
Does business insurance cover broken equipment?
Equipment breakdown coverage is an optional part of a business insurance policy. It may help pay to repair or replace damaged or broken-down equipment after a covered incident.
