What range of equipment does business insurance cover?

Insuring your equipment can spare you many headaches, especially when it comes to money. Learn which equipment you can insure to find the best coverage for you

David Granahan - Writer for NEXT Insurance
By David Granahan
Michelle Meyer - Editor for NEXT Insurance
Reviewed by Michelle Meyer
Matt Crawford for NEXT Insurance
Fact-check by Matt Crawford

Updated June 2, 2023.

Equipment insurance for small business

Equipment insurance can fall under business insurance. It can cover items such as machinery, tools, fixtures and electronics against damage, accidents and theft.

Therefore, businesses that rely on certain equipment to operate can benefit from this policy. Small businesses in particular need to look after their most valuable assets and make sure coverage is in place. Otherwise, they can face significant income losses as operations come to a halt.

Let’s look at some examples.

1. Personally-owned equipment

You can get coverage for the equipment you own and need for the day-to-day operations of your business. But any personal equipment that's not used in connection with the business may not be covered.

What is covered

  • A new mechanic accidentally damages a power drill during training
  • Lighting fixtures in a yoga studio needed to complete classes have stopped working since a power surge
  • A sole trader whose point-of-sale equipment for a storefront location is vandalized
  • Benches or weight machines are broken at a gym because of member negligence
  • Children have damaged furniture in a daycare center

What is not covered

  • A contractor's personal mobile phone that's not used for business purposes
  • Gardening tools used to maintain personal properties

» Explore NEXT's tools and equipment insurance options

2. Employee-owned tools and equipment

Equipment or tools owned by an employee and used for business purposes can be protected with equipment insurance. Small businesses can replace equipment that was stolen or accidentally damaged.

What is covered

  • Items an employee needs to do their job were stolen from their toolbox
  • A remote writer's work laptop is stolen from their co-working space
  • Safety work gear in a factory gets damaged on the job and needs to be replaced

What is not covered

  • Personal cameras that aren't being used in commercial activities
  • Knives that a chef owns for personal use

» Discover how contractor tools and equipment insurance can protect your business

3. Borrowed equipment

Business insurance can also include equipment that's not owned by a business but has been borrowed for temporary use. However, rental equipment is excluded from this.

What is covered

  • A construction company borrows a bulldozer from a contractor and it's damaged in a storm
  • A restaurant borrows a commercial oven for a special event and it's damaged in a fire
  • A consulting business borrows electronic equipment (e.g., projectors) for a conference and it's damaged during a power surge

What is not covered

  • An excavator rented by a mining business
  • A bulldozer that was damaged due to operator error

Protect all your equipment with tailored business insurance

We recommend getting affordable, tailored business insurance for your profession that gives you peace of mind, especially if you travel with your gear to different locations. This safety net can prevent you from shouldering the entire cost if any equipment gets lost, stolen or damaged.

Your first step is simply answering a few questions to get an instant quote online in less than 10 minutes.

NEXT: Tailored Small Business Insurance

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» Find out if your personal vehicle requires business insurance coverage


What does business insurance cover?

Business insurance covers public liability, professional liability, tools and equipment insurance, etc. Small businesses can choose separate policies for their specific needs.

Does business insurance cover tool theft?

Yes. If a tools and equipment policy is part of your business insurance coverage, stolen items belonging to your business, your employees, and even borrowed equipment will be covered.