The Problem with Employee Tools in Garage Insurance

Employee tools are a big problem.

Wait, just employee tools? If you are an auto dealer or own an auto body shop, you are probably swimming in tools.


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Tools are everywhere, and depending on what kind of shop you run, or what kind of cars you sell, you may have entirely different sets for different makes and models – or for different employees.

While most shops or service centers have their own gear, it is incredibly common for employees to have their own set that they have slowly built up over years of work and investment.  They are often a good mechanic’s pride and joy.

And they are almost always incorrectly insured.

So let’s get into why that is and how to save you – and your employees – from a big hole in your coverage.

A set of auto mechanic employee tools.

Well tooled up.

The gap in your Property Coverage.

This may shock you, but here it is:


Why, you ask?  For one simple reason.  They aren’t owned by the business.  Your business property coverage that is a part of your garage insurance policy covers the stuff your business owns.  Period.

If your employee owns their own tools, it does not belong to your business and isn’t covered by the policy.  Make sense?

Let’s look at an example of what could happen if you don’t have a solution to fix this hole in your coverage:

A thief breaks into the service center of your auto dealership.  First they grab the towers from the computers the service center use, then they force open the garage door and load every tool that isn’t tied down.  They slam shut their plain white van and roar off into the night before the police arrive.

Raccoon stealing food to represent a thief stealing employee tools.

Hope you have good coverage!

Your policy will reimburse you for what you’ve lost for just about all of it.  The data inside the computers could be a problem (I hope you have Cyber Liability Coverage!).  But the biggest problem are tools owned by your employee.

Unless they have their own insurance, those things are gone, with no reimbursement.

Man working on car.

How expensive are employee tools?

You probably know this, but it is worth reiterating.  One source said:

A tool budget remains part of your professional life, industry training manager Mark Larsen told WCTI News Channel 12 in North Carolina in a 2011 interview. Larsen estimated the value of tools a technician keeps to be around $25,000. Wards Auto puts the figure at $50,000. According to Lake Area Technical Institute, mechanics add to their tool collection throughout their careers to accommodate changes in technology and improve productivity.

One of our own agents spoke with a mechanic who claimed to have over $100,000 of tools that were only his, not his employers.  If you have several mechanics, each with their own tool set, this hole in coverage suddenly becomes a much bigger deal.

What you can do about it.

Luckily for you, there are options to help plug this hole and keep you and your employees safe.

Most policies have the option of adding a new layer of coverage to the policy creatively called EMPLOYEE TOOLS COVERAGE.

This will protect you from the embarrassment of telling your mechanics that while your stuff was covered, theirs wasn’t and they have lost it all.

This coverage starts with very low limits however!  You have to make sure to increase this amount in order to cover just one of your employee’s tools.  And I don’t have to tell you how expensive a good tool set can be!

Employee tools can be safe and secure – but knowing that they will be replaced in case of an accident will make you and the guys under the hood feel a lot better.

Beautiful car engine.

Can’t paint a work of art without the right brush.

Let’s wrap it up.

Now you know about this common pitfall and how to avoid it.  You may have already had this hole covered as a part of your garage insurance policy, but do you have enough employee tool protection?

And did you even know this was a problem?

It’s time to talk to an expert and see what other parts of your policy aren’t up to snuff.  Click the button below and let’s get you set up with a Garage Expert who can walk you through exactly what you have – and what you’re missing.

You – and your incredibly valuable employees – deserve to have those tools insured.  Let’s make it happen.

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