Have you ever opened your toolbox looking for that one, special tool only to find out that it’s missing? In fact, three drawers in your box are empty! You ask your co-workers if they know anything about your missing tools and discover that the hangar door was pried open last night. You talk to your employer about the disappearance of your tools, and they gently remind you that they don’t insure employees’ tools. You vaguely remember reading an article about insuring your tools a while back, but never got around to calling your insurance broker to get a quote … now you are left $20,000 short of a full tool chest.
Some aircraft owners may have tools or equipment in their hangar. These may be covered for damage or theft under the aircraft insurance policy. But what about your mechanic’s tools that he left in there during some maintenance, or your buddy’s tools? What kind of coverage is available for you as a maintenance professional working for an FBO?
If you have contents insurance for your home or business, it’s possible but not guaranteed that you may have some coverage for your tools and equipment. However, the level of coverage will vary from policy to policy and may not be enough to cover the replacement value of your tools and equipment — it’s also possible that your policy won’t provide coverage for tools/equipment when they are in transit.
The solution
Aviation property policies often times include a basic level of “tools” coverage. In some cases they may only cover the replacement cost of one specialized tool. To ensure you are covered for the scenario above it is important to keep a value inventory of your tools. This may be time consuming at first (especially if you have not done this before) but is easier over time as you add tools to the inventory list. I recommend keeping this list in a plastic sleeve on the side of your tool chest or electronically so it is readily accessible through your mobile device. At the very least, you should take a picture of the contents in your toolbox.
Once you have your inventory list, complete with replacement cost values, ask your aviation insurance broker for a quote. They should shop multiple insurance companies for you to make sure you have the best pricing and coverage combination.
What does it cover?
Property policies are intended to cover against damage or theft of the physical property scheduled on the policy.
The policy will typically cover any accidental damage, as well as theft as a result of violent or forcible entry. Some policies will also cover mysterious disappearance.
These types of policies usually provide either a specific blanket monetary amount of coverage for all or selected types of tools and equipment, or coverage of a nominated value for individual items — or a mixture of both, depending on your needs. However, policies will vary between insurers. Since tool coverage covers a broad array of tools, this form of coverage is usually provided on an unscheduled “blanket” basis. In other words, it is not necessary to schedule every socket on the policy.
How do I know if I need it?
As always, the best way to determine what is most appropriate for you and your business is to speak with an aviation insurance professional. Make sure you speak to someone who has access to all aviation insurance companies, and is familiar with mechanics and maintenance operations.
These types of professionals will be able to assess the specifics of your situation and then make an informed recommendation about what insurance policy is best for you. They should also be able to make recommendations on which insurance company is best suited to your needs.
Ask lots of questions — having clarity on the ins and outs of insurance related to your business will only enhance your ability to make the kinds of decisions that can help make sure you are covered and the tool drawers are full.
