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Your tools are your livelihood. Here’s how to insure them right

As a tradie, your tools are your livelihood. Whether it’s a $200 impact driver or a $4,000 laser level, every item in your kit helps you deliver your job. When they vanish, so does your income.

That’s why tool insurance for tradies is one of the smartest ways to protect your day-to-day work, income, and the ability to get back on site when things go wrong. Especially when insurance for stolen tradie tools could mean the difference between being on-site tomorrow or chasing cash to restock.

Let’s break down what the right tool cover actually protects, how much it could save you, and what to look for before choosing a policy.

What does tool insurance actually cover (when home/vehicle policies don’t)

Tool insurance steps in when your gear gets stolen, damaged, or destroyed. It helps you get back on-site faster without the upfront shock to your wallet. But keep in mind, theft from unlocked vehicles and general wear and tear are typically excluded from cover.

Depending on your policy, cover usually includes

  • Theft, even from locked utes, trailers, or job sites
  • Accidental damage from drops, knocks, or misuse
  • Fire or storm damage, especially for gear stored in sheds, garages, or vehicles

Standard home or vehicle insurance usually excludes commercial-use tools

What many tradies don’t realise is that standard home or vehicle insurance usually excludes commercial-use tools, especially if they’re stored offsite or in transit. That’s where dedicated cover for stolen or damaged equipment steps in.

Let’s say your $3,000 drill kit disappears from your van overnight. Or your laser level is melted in a jobsite container fire. Tool insurance covers the cost to replace them so you’re not out of pocket. Some good policies also cover hired tools, testing equipment, or storage containers.

Without it, a single theft could wipe out your next week’s income, derail your schedule, and force you to choose between replacing gear or paying bills.

Why tradie tools are high-risk targets

Tool theft is one of the top insurance claims for tradies, and for a good reason.

  • In 2023, over $33 million worth of tools were stolen from Victorian tradies, with consistent reports pointing to rising theft incidents year over year.
  • A total of 18,626 power tools and 14,911 hand tools were reported stolen across Victoria in that year.
  • Since tools are high-value and easily portable, they’re prime targets for theft from job sites, unlocked vehicles, and public locations.
  • Recovery of stolen tools is rare, often because tools lack identifiable markings or serial numbers.
  • The average claim value for tool theft varies, with some claims reaching up to $15,000, which can significantly impact a tradie's income.

Given these risks, securing adequate tool insurance is essential to protect your livelihood and ensure continuity of work.

The hidden cost of not having cover

Most tradies think that losing tools is just about the price tag. But it’s the domino effect that really stings.

  • Replacing a full kit, like drills, levels, saws, can easily run you $5,000 to $15,000, depending on your trade.
  • While you’re out replacing tools, the job’s on pause. That’s missed income, and worse, unhappy clients who might not call again.
  • One delay can throw off your whole week’s schedule. Rescheduling subcontractors or inspections means lost hours and added stress.

Case scenario: Your ute gets broken into. No insurance. You lose $6,000 worth of gear. It takes 5 days to replace everything and get back on-site. That’s nearly a week of missed wages. Plus, the client’s now considering someone else for future work.

Having tool insurance for tradies isn’t just about loss recovery. It can keep your business running when things hit the fan.

Common myths that cost tradies thousands

If your tools earn your income, don’t leave protection to guesswork.

  • “My car insurance covers my tools.” Personal car policies usually exclude tools used for work, especially overnight or when left in a ute. Check your Product Disclosure Statement.
  • “I only do small jobs.” Thieves look for easy targets, not job size. Any kit is valuable and quick to resell.
  • “I’ve never been hit.” One theft can stop work, delay jobs, and strain cash flow.
  • “They’re safe in the ute.” Unattended vehicles and site sheds are common targets, and many policies set limits or conditions for theft from a vehicle at night.

Read your policy now, not after a loss. Close the gaps that could cost you.

How much cover do you really need?

If you had to replace all your tools today, what would it cost? Not just the obvious ones, like your driver, drill, or nail gun. Consider your meters, blades, batteries, test kits, and the storage gear that holds it all together. The total cost often adds up faster than you think - and don't forget tools left in your house as well as tools you carry to work.

Pro tips for getting cover right:

  • Keep receipts - Even photo receipts with your mobile phone. Insurers will need evidence of ownership of tools
  • Cover tools everywhere - Ensure that tools left in your house are insured as well as tools you carry to work
  • Don't underinsure - Low cover might save premium now, but won't help when you need to replace your entire kit

Underinsurance might save a few bucks on your premium now, but if some day, by chance, your tools are missing, that low cover amount won't go far. Keep a quick photo inventory and receipts if you can. It makes claiming faster and protects your full investment.

Tool insurance helps you cover the actual cost of what you need to get back on-site without delay.

Marsh's tools and portable equipment insurance solution covers up to $10,000 in total (with a $2,500 standard sub-limit per item unless otherwise arranged) and offers flexible limits depending on your trade needs.

What makes a good tool insurance policy?

Jobs stall when tools are stolen or damaged. You need cover that matches how you work and pays quickly.

Watch for fine print that only covers theft from a locked garage or excludes accidental damage and fire while you’re on site. Choose clear, upfront wording, cover that applies wherever you reasonably store your tools, and a responsive claims service that gets you back on the job fast.

Just straightforward cover that helps you keep working

Tools and equipment insurance arranged by Marsh is tailored for tradies and built around real job site risks, with no hidden clauses or unnecessary extras. Get your quote in minutes and stay on the tools.

Key takeaways

  • Tool insurance can cover theft, accidental damage, and fire/storm loss depending on your policy.
  • Standard home or car insurance usually doesn’t cover work tools, especially when stored offsite.
  • Tool theft is one of the most common insurance claims for tradies in Australia.
  • A single break-in can cost up to $15,000 in lost gear and several days of missed income.
  • Underinsuring your tools can leave you short if you need to replace your entire kit at once.
  • A good policy offers fast claims, flexible storage cover, and trade-specific understanding.
  • Tools and equipment insurance arranged by Marsh is designed for tradies with clear terms and practical protection.

Protect your tools, protect your business

Your tools are the backbone of your trade — and your livelihood. Don’t leave your gear vulnerable to theft, damage, or unexpected costs. Get a tailored tool insurance quote today to help keep your business moving forward.

Get a quote now

Frequently asked questions on tool insurance for aussie tradies

Your tools are your livelihood. Protecting them isn't just a good idea, it's a crucial business decision. Here’s everything you need to know about getting the right cover.

Tool insurance is a policy that helps repair or replace your gear if it gets stolen, lost, or accidentally damaged. It's often included as part of a "Tradies Insurance" package under the name portable equipment or general property insurance, and it's designed specifically for items used on the job.

No, it's almost certainly not. Your home and contents policy is for personal items at your home address. It typically excludes items used for business and won't cover your gear once it's in your ute, on a worksite, or in storage. Tool insurance is designed for commercial use, protecting your gear wherever the job takes you.

Most standard policies will cover your tools for:

  • Theft: From a securely locked vehicle, workshop, or worksite.
  • Accidental Damage: Like dropping a power tool off a roof or damaging it in transit.
  • Loss: In certain situations, like items being lost during transport.
  • Defined Events: Damage caused by events like fire, floods, and storms.

Always read the fine print in your Product Disclosure Statement (PDS), but common exclusions include:

  • General wear and tear, rust, or corrosion.
  • Internal mechanical or electrical failure.
  • Theft from an unsecured location (e.g., tools left in an unlocked van).
  • Unexplained or mysterious disappearances where there is no evidence of theft.

Yes, but only if there is proof of forced entry. This is a critical point. Your insurer will need to see evidence that a thief broke a lock, smashed a window, or pried open a secured toolbox. If you leave your canopy or doors unlocked, your claim will be denied.

This depends entirely on your policy. Many insurers will cover them only if they were stored in a locked shed, a secure on-site container, or a locked room. Leaving tools out in the open overnight is a common reason for claims to be rejected.

The cost depends on factors like the total value of your tools, your specific trade, and your location. As a general guide, cover can range from $30 to over $100 per month, depending on how much gear you need to insure.

Consider this: how much would it cost to replace your most expensive power tool tomorrow? For many tradies, the monthly insurance premium is less than the cost of replacing a single high-value item. It protects your cash flow so you can get back on the job without a massive out-of-pocket expense.

Yes. Because tool insurance is a necessary expense to protect your business assets and income, the premium is 100% tax-deductible for Australian businesses and sole traders.

You must insure your tools for their full new-for-old replacement value. To do this:

  1. Create a detailed inventory or asset register of every tool you own.
  2. For each item, list the brand, model, and the current cost to buy it new today.
  3. Add up the total. This final figure is the amount you should be insured for.

Act quickly and follow these steps:

  1. Report the theft to the police immediately. This is the most important step. You cannot make a claim without a formal police report number.
  2. Contact your insurer or broker as soon as possible to notify them of the theft.
  3. Provide all necessary information, including the police report and proof of ownership.

Proof of ownership is essential for a successful claim. The best evidence includes:

  • Original receipts and invoices (keep digital copies).
  • Photographs and videos of your gear, clearly showing brands, models, and serial numbers.
  • An up-to-date asset register or spreadsheet.
  • Bank or credit card statements showing the purchases.

Yes, absolutely. The head contractor's insurance policy will not cover your personal tools. As a subcontractor, you operate as your own business and are fully responsible for insuring your own equipment. Many principal contractors will require you to provide proof of your own insurance before you can start work on their site.

References:

  1. Tradie insurance solutions | Marsh Australia (au.marsh.com) 
  2. Stopping tool theft in your business | Marsh Australia (au.marsh.com) 
  3. Business asset insurance | Marsh Australia (au.marsh.com) 
  4. Handyman insurance | Marsh Australia (au.marsh.com) 
  5. Crime Statistics Agency Victoria, Recorded offences data tables, crimestatistics.vic.gov.au
  6. Australian Taxation Office, Deductions for business, ato.gov.au
  7. Australian Institute of Criminology, I want to report a crime, aic.gov.au 

Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“Marsh”) arranges the general insurance (i.e. not the Discretionary Trust Arrangement) and is not the insurer. This page contains general information and does not take into account your individual objectives, financial situation or needs. For full details of the terms, conditions and limitations of the covers, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh on request. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or re-insurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). Any advice or dealing in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). JGS and JLT are businesses of Marsh McLennan. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.

LCPA 25/461