Tools and equipment cover for a van- or ute-based business
My tools are worth about $25,000 and live in the ute overnight. What do I actually need specified, and what is usually left out?
Why $25,000 of tools is the number that changes the answer
At a few thousand dollars of tools, the difference between a broad summary and a precise schedule may never matter to you. At $25,000 sitting in a ute overnight, the wording does all the work. This is where the difference between a schedule and a summary one-pager becomes the difference between a paid claim and a declined one.
Specified items versus unscheduled cover
The first question is whether your cover is written on a list or open. In an example business pack policy wording, the general property section defines specified items as property that is specifically described on the schedule, and unspecified items as property which is not a specified item. Under that wording the insurer pays up to the sum insured for each specified item, but caps any one unspecified item at $2,500, with the total for all unspecified items capped at the sum insured shown on the schedule.
Read that again with your number in it. If your $25,000 of tools are not on the schedule and the policy caps any one unspecified item at $2,500, the gap is not small. Many policies also apply a separate overall sub-limit to unspecified items, so ask for both numbers rather than one. This is the line to read first on a mobile tradie’s policy, and it is rarely on the summary page — make sure you see the schedule and the full wording.
Theft away from the premises
The second question is where. In the same wording, the general property section covers items damaged during the policy period anywhere in the world — so location is not automatically excluded. But theft away from the insured location is handled through separate theft provisions and extensions, and those carry their own conditions.
The example wording includes an extension for theft of other equipment (property not belonging to you but in your control) with hard security conditions: the property must have been in a securely locked vehicle with forcible and violent entry, or securely and permanently affixed to a building or vehicle and forcibly removed, or in a vehicle and securely chained with a steel chain of 10mm link diameter or greater and a padlock, or kept in a private residence, or in a securely locked building with forcible entry. That extension is capped at $2,000 in any one policy period, so it is not your tool cover.
The practical translation: how you store the tools at the end of the job is part of the cover, not just good practice. Chain grade, padlock, forced entry — the wording is specific on all three.
What general property cover excludes outright
The wording also rules whole categories out. General property does not cover damage from wear and tear, gradual deterioration, corrosion, rust or oxidation, mould, inherent vice or latent defect. It does not cover faulty materials or faulty workmanship, mechanical, hydraulic, electrical breakdown or electronic failure, or dishonest acts involving your items by you or your employees.
Two of those matter for tradies specifically. Breakdown is excluded from property cover, so a machine that fails internally is a different problem from one that is stolen or water-damaged — some packs carry separate breakdown sections. And the wording expressly does not cover damage to vehicles, motorcycles, trailers or caravans: your ute is not covered by the tool section, which is a separate question we cover in another guide.
New tools
If you buy a replacement, ask about new-item cover rather than assuming it is automatic. Some sections provide temporary cover for newly acquired electronic equipment of a similar type for a limited period, subject to you providing details within that period and to the sum insured for similar items on the schedule. The conditions differ by section, so read the one that applies to your tools rather than assuming from another.
What to get on the schedule. For a tool value around $25,000, these are the items to nail down before you sign, not after:
- Each significant tool specified individually, with its own sum insured, rather than left in unspecified cover.
- The aggregate sub-limit for any unspecified items, and the per-item cap, stated on the schedule.
- Whether cover applies away from the insured location, and under what security conditions.
- The excess that applies to each claim, and whether it applies per occurrence.
- New-item cover: how long it runs and what you must do to keep it valid.
What to do next
Give a licensed broker the actual list and values, and ask them to schedule the items rather than lump them. Then read the schedule against the general property section of the PDS before you accept. business.gov.au’s guidance on managing business insurance makes the same point: read the PDS, understand what is covered and excluded, how claims are settled, and any excess.
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Sources
Tool cover differs on whether it is open-accident or an open list of specified items, and on whether tools are covered away from your premises, which is where mobile businesses actually lose them.
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