Tools & Equipment Insurance
Does Tools Insurance Cover Equipment Breakdown?
No — standard tools policies exclude mechanical breakdown and electrical failure. Equipment breakdown insurance is a separate coverage line.
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Is mechanical or electrical breakdown of tools and equipment covered?
Tools and equipment policies cover sudden, external physical losses — theft, fire, vandalism, accidental damage. They do not cover mechanical or electrical failure — the tool simply stops working due to internal causes.
Equipment breakdown insurance (also called boiler and machinery insurance) covers sudden and accidental breakdown of mechanical and electrical equipment. For contractors with expensive, motor-driven equipment, this can be a valuable add-on.
The practical boundary: if your drill is stolen, tools policy pays. If your drill’s motor burns out, that’s wear and tear or mechanical failure — neither tools nor equipment breakdown typically covers it. If your expensive diagnostic equipment short-circuits due to a power surge, equipment breakdown may cover it where a tools policy would not.
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