Tool, home and garden, sharpening and repair services are establishments that primarily repair and service home and garden equipment without retailing new tools and equipment. If you own a tool repair shop, you might repair items like handheld power tools, edgers, leaf blowers, and trimmers.
Repairing these items is complicated. You need to be knowledgeable about products from multiple manufacturers, and you must constantly learn or update your skills as new products and technologies emerge.
Tool repair businesses need comprehensive business insurance tailored to their needs in order to protect their assets and avoid financial destruction. An independent insurance agent can help you get the coverage you need.
Why Do You Need Tool Repair Shop Insurance?
The items that you take into your possession for repairs are valuable to their owners, and your customers want them fixed properly and quickly.
Imagine all of the adverse events that could take place in your line of work, whether you are working in your shop, or even at a customer’s home. You or one of your employees can drop or break a tool or piece of garden equipment that’s been brought in for repairs. Your shop can catch fire, damaging everything inside.
Like any retailer or shop owner, the possibility for property damage to your building and business property, or your customers’ property, is endless. You need tool repair shop insurance to protect:
- Your building or shop
- Your own office equipment, computers, tools and equipment
- Your customers’ physical well-being on your premises
- Your customers’ property while in your care
The specific business insurance policies that you need depend on where you work (in a shop, at your home, or at your customers’ homes or businesses), the number of employees you have, and the types of services that you provide.
What Does Liability Insurance Cover?
Tool repair shops need commercial general liability (CGL) insurance to protect them from bodily injury and property damage they cause while doing business.
General liability insurance offers broad protection for a variety of liability risks that your business is exposed to, from customer slips and falls to claims of advertising liability, slander, libel, and more. Your CGL policy will pay for your legal defense, attorney and court costs, and any settlements or judgments that you must pay, up to your policy limits.
If you make house calls, your CGL policy should cover you for bodily injury and property damage claims that occur in your shop or while working at a customer’s home.
What Does Property Insurance Cover?
Like most other business owners, tool repair shops need business property insurance to protect their buildings and contents from costs associated with weather, fire, smoke, vandalism, theft, and other types of property damage. Business property insurance not only protects your building (if you own it), but also your own computer systems, fixtures, parts inventory, tools, and other equipment that you use in your operations.
Your business property policy should also include business interruption coverage, which provides income protection if you must temporarily cease operations due to a covered loss (a property loss due to a fire, a severe weather event, etc.).
Your independent insurance agent can help you determine if you should purchase a business owners policy, which is a small business insurance policy that includes property coverage, liability coverage, and business interruption coverage in one affordable package.
Do Tool Repair Shops Need Commercial Auto Insurance?
Another major concern for tool repair businesses is business autos. Do you make deliveries or pick up customers’ property from their homes or places of business? If your business owns vehicles, or you or your employees drive personal vehicles for business use, you need commercial auto insurance.
Commercial auto insurance will cover your business autos just like your personal auto insurance covers your personal vehicles. However, if you or your employees drive personal vehicles for business use, you need non-owned commercial auto insurance to cover the drivers and vehicles.
Important Bailee’s Coverage for Tool Repair Shops
Most tool repair shops will want to consider bailee’s coverage. Because standard business property and liability policies only cover your own business property, you need special coverage for your customers’ property that is in your possession.
Bailee’s coverage is an add-on to a business property policy that covers non-owned property (e.g., customers’ tools and equipment in your shop for repair) that is stored at your shop or in your possession.
What Other Insurance Policies Do Tool Repair Shops Need?
In addition to the policies described above, it is highly likely that tool repair shops will need additional types of coverage, depending on their specific business. Many of these policies can be tailored to the exact needs of the business and the risks it faces.
- Employee theft and crime coverage protects you from instances of employee theft, fraud, or other crimes against your business.
- Workers’ compensation insurance is usually required for any business that has employees, and pays for lost income and medical expenses for employees that are injured on the job.
- Inland marine coverage protects tools, equipment, and supplies that you bring off-site to make repairs; commercial property and commercial auto policies typically exclude coverage for those items once they leave your business premises.
- Employment practices liability coverage protects you from employee lawsuits related to discrimination and other business practices.
- Cyber liability insurance provides coverage in the event of a data breach involving your business.
- Commercial umbrella insurance, or excess liability insurance, provides an extra layer of liability protection above and beyond the limits of your CGL and certain other liability policies. It kicks in and provides coverage when those other applicable policies have been exhausted. If you are involved in a significant claim or lawsuit, this coverage can be the difference between staying in business and closing up shop for good.
- Sign coverage pays for damage to outdoor signs that are not attached to your building when the damage is caused by weather, vandalism, fire, etc.
- Utility interruption coverage provides income protection if you are unable to operate due to a covered utility (water, electrical) interruption.
How Much Does Tool Repair Shop Insurance Cost?
Insurance for a tool repair shop can be several hundred dollars per month to thousands. It depends on:
- The size of your business
- The location of your business
- The number of employees
- The value of the building (if you own it) and other property and physical assets you keep on your premises
- The types of coverage and amount of coverage that you need.
If you are a sole proprietor with just a few employees, you can expect to pay far less for your business insurance than a multi-location business with numerous employees.
Ultimately the types and amounts of coverage you need to adequately cover your risks will dictate the cost of your coverage.
Find and Compare Quotes
An independent insurance agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Insurance Agent
Independent insurance agents simplify the search process for finding the right tool repair shop insurance. They’ll walk you through some handpicked policy options and explain the details and options.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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Insurance Expert, Paul Martin