Recently, I was lucky enough to sit down and have coffee and a chat with Joe from AJ Insurance Services to discuss Tradie Tool Insurance.
Not only were his answers incredibly informative and focused, but he was also welcomingly approachable and remarkably friendly — for an insurance provider!
Anyway, as I gained so much from our time together, I thought why not share his thoughts, advice, and opinions with you!
So, Let’s Start Off With the Basics — Why Is Ensuring Your Tools of Trade Important?
Because — and really I don’t want to sound overly dramatic this early in our chat — it can mean the difference between a business surviving or failing.
Whatever the trade — brickies, chippies, or stonemasons — in fact, any operation that relies mainly on tools to keep their enterprise running, tradies tools insurance is crucial.
Look, if their vital equipment is stolen or maliciously damaged, they could be unable to work for a worrying length of time. And naturally, being unable to operate means no income — not to mention the annoyed and frustrated clients that now have to be let down.
But, I think it’s more than that. You have to remember that about a quarter of tradies are self-employed, and in the construction industry, it’s somewhere around 40 percent that work for themselves.
These guys have often invested life savings, borrowed from family members, and taken loans from banks to finance their necessary power saws, cement mixers, demolition hammers, etc.
If they lose their tools — they may not have the cash to replace them. Work equipment is often the main asset of a self-employed tradie — and theft or damage could mean the end of the business, while still having to face the realities of repaying the debt.
And, I know that was a rather long route to answering your question, but in short, Tradies Tool Insurance defends against these scary prospects, by covering the cost of replacement or repair of job-crucial equipment.
If You Could List the TOP Five Reasons for the Importance of Insuring Your Tools of Trade, What Would They Be?
Ha, ha! Now you’ve put me on the spot! Hmm … the top reasons for tool of trade insurance … I guess, in no particular order, I’d say:
- Defending your business.
- Protecting you and your financial dependents.
- Safeguarding your financial investment.
- Peace of mind.
- Shielding your business reputation for getting the job done.
A Basic Question! What Does Tools of Trade Insurance Cover?
Ah! Now that’s a more interesting question than you might first think. It’s not quite as straightforward as it sounds!
Generally speaking, tool insurance for tradies covers theft, malicious damage, and tool loss from insured events — like fire, flood, storm, lightning, and explosions. However, it’s important — actually more than that, absolutely crucial — that you read and understand the insurance policy. The protection can differ from provider to provider.
Let me use theft as an example. Ok, so you assume that’s easy — some idiot steals your jackhammer, so you’re covered. At least you think that, because when you were sold the tool protection, you were told or read that theft was included.
However, depending on the particular policy, you may or may not be eligible for a claim.
That’s a problem.
Many insurances safeguard against theft from basically anywhere, others specify that it has to be stolen from secure and locked premises, and a lot don’t include equipment in vehicles or in transit.
So, I’d give this advice — be really, really careful. Read the exclusions section when taking out tools of the trade insurance. I know it’s boring, but it’s important.
And, I don’t want to blow our own trumpet, but at AJ Insurance, this is where we are different from many providers.
Not only do we ensure that our clients fully understand the extent of their trade tools insurance policy — but also tailor packages to meet the exact equipment protection cover they need.
To be fair, that should be the minimum expected of any respectable and professional broker. Unfortunately, in the real world, it’s not the case.
So, Is It Important for All Tradies To Take Out Tool Insurance?
If the tradesperson or tradeperson’s business owns tools of trade, then definitely yes.
Here’s the thing. I know examples where some contractors have explained to subbies that their own insurance policy will cover subcontractors’ tools. Although possible, albeit unusual, this will not safeguard the tradies’ tools when they leave the site — leaving the tradesman exposed.
To me, it’s a no-brainer. If someone has the necessary equipment to do their job — it should be covered. A relatively small premium can protect livelihoods, loved ones, business existence, and reputation. That’s priceless.
Oh, and one more thing.
It’s not just guys with seriously expensive individual tools I’m talking about — such as high-end welders, metal saws, or compressors and such.
A tradie with a large toolkit of small, handheld equipment can be worth a fortune when all the units are added together. It’s like this — a serious burglary that wipes out a poor tradie’s entire tool inventory is equally as devastating as losing one high-ticket item.
At AJ Insurance, What Trades Do You Cover Tool Insurance For?
If you have a few spare hours, I could list them all — but I’m guessing you’re too busy for that!
At our last business performance audit, our client base included over 150 different trades. So, electricians, plumbers, solar panel installers, landscape gardeners, welders, fencers, builders / building companies, civil contractors, mining companies — you get the idea. You name it, we’ve probably insured it.
We also cover tradie businesses with multiple employees and trucks on the road, and provide amazing value for their portable equipment insurance.
Here’s the key, and a bit of technical speech! If a person, or business, uses tools that are crucial to the fulfilment of their business services, they can be covered by our insurance for tools of trade.
Don’t forget though — a tradie needs protection that’s relevant to their business size, activities, areas of risk, tool inventory, etc. Whether they’re a carpenter or auto technician — they’re going to need a broker that will work with them to create bespoke and suitable packages.
It’s just good business practice. For starters, it ensures the tradesperson or company is completely protected — but importantly, it means these guys are only paying for the protection they need, not what they don’t.
We’ve Addressed What Is Covered by Tool Insurance — But I’d Like To Know, What Isn’t Covered by Tool Insurance?
You’ve hit on something really important there.
Whatever the occupation or business type, the tradie should always ask themselves — or actually their broker or insurer — what isn’t protected by tradesman tool insurance.
Getting the choice of insurance wrong, or insufficient protection, can mean the difference between an enterprise’s success or failure. This happens too often, trust me, where negligent providers haven’t informed, or the client hasn’t asked, about the exclusions — despite the tradie taking out expensive insurance.
Broadly speaking, areas that aren’t covered include things like breakdowns and wear and tear, court orders confiscating items, terrorism, non-portable items, improper use, or the tradie intentionally breaking or losing their equipment.
But, as I mentioned earlier, all policies are different.
They may include tools in transit or accident, they may not. Or, they may include the tradie accidentally breaking their own tools, or this could be excluded. That’s why I keep stressing the importance of tailored cover — whoever your broker or insurer.
An experienced provider will always be able to adjust the policy to suit the tool protection needs of their client. And if they can’t, they can usually advise on combining different insurances to provide the safeguarding.
For example, and I don’t want to be facetious, but assume a builder drops their hammer drill onto the head of a customer — leading to a broken tool and a bleeding head. While tool insurance only could well address the cost of replacing the equipment — it’s going to do nothing for the poor, injured, and probably angry client.
But, if you combine public liability protection with trade tool insurance — everyone is happy and protected. Alright, the wounded client still might not be over the moon, but at least the business can satisfy any claim they might make!
What Other Insurance Do You Help Tradies With?
Any protection they want or need!
I know you’re probably bored now of me saying it, but tradespersons need personally tailored protection. Look, no two businesses are the same, and therefore, neither are their areas of risk.
So, at AJ Insurance, we spend time with our clients — online, in our office, on the telephone, or in person over a cup of coffee, wherever — just to learn about their enterprise. From there, we can suggest the insurance they need.
I’m probably going to miss something out here and regret it when I’m back at the office — but our most common insurances for Aussie tradies on top of tool protection, are motor, property, personal accident, and professional indemnity. Naturally, again, depending on the needs of the enterprise. Oh, and tax audit cover too! See, told you I’d forget one!
Since I’ve got this opportunity, I’d like to throw in that one of our most popular insurances is our specialist Tradie Insurance. It bundles up all the cover I just mentioned into a single package. Basically, everything the tradie needs!
And, I promise the last time I’ll mention it today — but of course, we can fix, adjust, or alter the tradie package combo to suit the needs of the client. We’re here for them!
Finally, if You Could Give Just One Piece of Advice on Tradesman Tool Insurance — What Would It Be?
Above all, get a specialist tradie broker who takes the time to understand your particular business, and explains the why’s and how’s behind your policy.
It will save you serious money, and ensure your business is properly protected.
Joe, Thank You for Your Time Today! If a Tradie Wants To Get in Touch, What Should They Do?
You’re totally welcome, I’ve really enjoyed it. And, if someone needs insurance, a quote, or just wants more information on Tool Insurance, they’re welcome to contact me personally!
