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A row of construction equipment covered by heavy equipment insurance


June 23, 2022

7 Reasons Why You Need Heavy Equipment Insurance

For various types of contractors, heavy equipment is needed to keep business operations running. Damage, theft, or vandalism of either rented or owned heavy equipment can result in major delays and surprise expenses. 

Regular equipment expenses (e.g. maintaining or paying rent on construction equipment) are costly enough. Therefore, other sources of sudden expenses (e.g. major repairs and replacements) can be a setback for your business. 

This is the main reason why heavy equipment insurance (also known as construction equipment insurance) is necessary. This type of insurance takes over where other contractors’ insurance policies end when it comes to protecting heavy equipment.

If you’re still wondering if you need heavy equipment insurance for your contracting business, read on to learn more about its key benefits!

Different kinds of equipment covered by heavy equipment insurance

1. Get Protection for Various Types of Equipment 

In insurance policies, the terms “tools” and “equipment” are very different. Tools are usually valued below $1,000. Meanwhile, “equipment” pertains to machinery valued above $1,000. This means that all of the following vital machinery are classified as equipment: 

  • Generators
  • Compressors
  • Bulldozers
  • Graders
  • Excavators
  • Hydrovac trucks
  • Tower Cranes
  • Loaders
  • Compactors or rollers

When it comes to replacement costs, some of the above are valued closer to $1,000 while some are a lot more expensive. Either way, construction equipment insurance can be set up for all kinds of construction equipment. 

Furthermore, construction equipment insurance can be purchased for both rented and owned equipment. This means that this type of insurance is suitable for you if you own any of the following: 

  • A contracting business that uses your own construction equipment;
  • A contracting business that rents or borrows equipment from another entity; or
  • An equipment rental business that rents out heavy equipment to contractors. 

2. Be Free From Worries Involving Damage, Theft, and Vandalism 

Essentially, heavy equipment insurance covers damage, theft, and vandalism of construction equipment. In such cases, heavy equipment insurance will cover consequent repair/replacement costs. In addition, if you operate an equipment rental business, heavy equipment insurance can also be set up to cover lost rental income while repairs/replacements are on the way. 

So let’s get into some important details about theft, vandalism, and damage. When are they covered, and when are they not?

Theft and Vandalism

Theft and vandalism are pretty straightforward. As long as they are done by external criminal elements, they are generally covered by heavy equipment insurance. However, the complete lack of security measures for a project site may weaken claims. This is why it’s advisable to maintain reasonable measures to protect your project site from criminal activity.  


Now we move on to “damage.” Equipment damage is usually only covered when it is inflicted by a covered peril. Generally, wear and tear are excluded causes. The following are examples of perils that are usually covered by construction equipment insurance or heavy equipment insurance: 

  • Fire
  • Flood
  • Weather anomalies
  • Accidental damage 

3. Let Your Business Recover Quickly 

Because you can rely on your heavy equipment coverage, you won’t be breaking the bank when paying for repairs and replacements due to covered perils. Hence, you can get these done as soon as possible, allowing your contracting business to get back on its feet quickly.   

Brand new construction equipment purchased with the help of heavy equipment insurance

4. Heavy Equipment Insurance Takes Over Where Other Policies End 

Numerous other commercial insurance policies may mention “tools and equipment” among their coverage points. However, bear in mind that these might have limitations. The only insurance that is truly targeted for heavy equipment is construction equipment insurance

Consider the following examples: 

  • Commercial property insurance – Though this is a must for many businesses that have a physical location, it will generally only cover fixed equipment—not mobile equipment like bulldozers, tractors, etc. 
  • Builder’s risk insurance – While this is one of the broadest policies that protect ongoing construction projects, by itself, it will only cover damage/loss of tools and equipment up to a limited value. 
  • Installation and tools floater insurance – This type of insurance is meant for tools and materials. It will usually not be enough to cover expensive machinery.

5. Get Plenty of Protection for a Minimal Cost 

Heavy equipment insurance protects some of the most expensive equipment in the construction industry—yet the cost to be protected is usually minimal. Though numerous factors can affect the price of heavy equipment insurance, on average, it costs just $100 a year (or $8.30 a month) for a coverage limit of $10,000. 

Note: The coverage limit can be adjusted based on the needs of your business. Generally, a higher coverage limit also equates to a proportionally higher premium.  

6. A Complete Insurance Bundle Makes Clients and Partners Trust and Prefer Your Business 

With heavy equipment insurance, your business is protected from sudden loss or equipment damage that can sabotage your projects. This type of insurance also helps businesses recover faster from such events and not be caught up in long delays. 

Therefore, having heavy equipment insurance as a part of your insurance bundle will make clients, project owners, investors, and partners trust your business more. 

7. You Can Get Heavy Equipment Insurance That’s Customized for Your Needs 

When you work with a trusted insurance brokerage firm, you will be able to get heavy equipment insurance that fits your needs and synergizes with the other insurance policies that you already have set up. 

The Most Trusted Provider of Customized Heavy Equipment Insurance 

Contractors Insurance, a leading insurance brokerage firm in Ontario, offers fully personalized insurance solutions. Our award-winning team can put together heavy equipment insurance that fits the needs of your business perfectly.  

With our construction equipment insurance, you can protect your business and keep your projects on track. Because our insurance plans are personalized, you also have greater control over the finer coverage details.   

Take the next step towards protecting your business. Contact us today! 


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