Tool theft is on the rise - and unless you’re taking proper precautions, your tools could be at risk.
In fact, tool theft has been growing since 2013, with over $300 million in losses reported each year. It’s an infuriating trend that leaves families vulnerable; after all, how can a handyman or contractor work without their tools?
But maybe you don’t need stats to tell you this. Maybe you’ve had tools stolen right out of your van.
Maybe you thought your tools would be safe on the jobsite, but one of your former employees decided they would help themselves to your tools.
Tool theft is devastating. You spent good money on those tools, but it’s not even about the money. Those tools are the lifeblood of your business. No one should be able to steal what you’ve worked so hard to build.
That’s why you should take these steps to protect your tools from being stolen.
This is definitely the MOST important thing you can do to prevent tool theft, because thieves will have a really hard time selling your stuff to pawn shops if they have your marker or brand. Think about it - if you’re a pawn shop owner, are you really going to buy and sell tools that have someone else’s business logo and phone number on them?
In terms of branding, here’s where I think a lot of handymen, contractors, and landscapers go wrong: They use paint or something removable to mark their tools.
It’s a good start, but it doesn’t go far enough to stop tool theft. It’s too easy for thieves to just scratch off the paint or slap another color over it and claim the tools as their own.
I recommend branding your tools with a stamp featuring your name and phone number. You can get customized iron brands here; just make sure you get one that can be used on all the different types of tools you have.
Once you have your branding iron, use a blowtorch to heat up the iron just enough so that you can mark your tools. I recommend leaving your mark on a part of the tool that isn’t immediately visible. That reduces the chance that the thieves will try to alter your tools to pass off as their own.
You might have been told that you only need general liability insurance to keep your business protected. But that’s not the only policy you need, especially if you’re working with a lot of tools.
Do yourself a favor and get tool & equipment insurance - it’s a type of policy that reimburses you for the cost of tools if they get stolen. Some insurance companies also call this inland marine coverage, but it's still a policy that can help you recoup those financial losses (up to your policy limit).
Here's how this coverage works:
Let's say you're a contractor who is helping a customer with renovations on her home. You usually park in the driveway in front of your customer's house, which means your van is typically in your line of sight.
However, the day comes when you need to work on the back of the house, meaning you don't have a clear view of your work van. Unfortunately, that's the day that your van gets raided by thieves - and the tools you left in the back of your van are completely wiped out.
In this example, your tools & equipment coverage could reimburse you for the cost of those stolen tools. That means you wouldn't have to pay out-of-pocket to replace those tools - your insurance policy would cover those costs (up to your policy limit).
I’ve talked to some contractors who thought that their auto insurance or homeowner policies would cover the cost of stolen tools. If you’re using your tools for business - which you probably are - then those policies don’t reimburse you for stolen tools.
And you don't want to find out that your tools weren't covered when it's too late!
At Simply Business, we offer tools & equipment coverage as an add-on with a standard general liability policy. If you're interested, talk to one of our US-based insurance agents or just use our free quote tool to compare GL policy options from insurance providers who specialize in contractors insurance.
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A lot of people will tell you to keep track of your receipts, but that’s just NOT enough. That’s why I want you to remember the Rule of 3 and create:
It seems excessive, but trust me: If your tools get stolen and your insurance company wants proof of ownership, you’re going to be really glad you have all these records.
Whenever you buy a new tool or have an hour to spare, just grab your phone and film yourself unboxing your tools. Make sure you zoom in on the serial number. If you want to go the extra mile, film yourself marking the tools with your personal brand.
Once you’ve finished filming the video, take pictures of your tools’ serial numbers and your receipts. You should try your best to save all receipts, but these photos can help in case you lose any. Email the photos and videos to yourself so you’ll always have access to them.
It takes a little while to get into this habit, but once you do, you’ll have all the documentation you need to prove those tools are actually yours.
If tool theft has happened to you, I’m willing to bet your tools were stolen right out of your van or truck. Think about it from a thief’s perspective: If you’re parked out in front of a client’s home with your van doors unlocked and you’re inside working, it’s not that hard for someone to grab a few tools without you noticing.
And that’s just the beginning. I’ve talked to a lot of people who say that they’ve had tools stolen by employees who have access to their locked vehicles and toolboxes.
I know it’s annoying advice, but you have to keep being diligent about locking up your tools. It’s not just for tool protection; if your tools get stolen, your insurance company will need proof you weren’t negligent in locking up your items.
Even if it takes a few extra minutes, keep locking up your tool box and vehicle. Don’t give them any reason to deny your claim, you worked hard for those tools!
If you have employees or use subcontractors, make sure you train them on how to keep track of any of your tools they might use.
Training doesn't have to be overly complex. Speaking from experience, it can be just as simple as being conscious of where you're placing tools when you're not using them. Tool theft is often a crime of convenience, so if your employees are trained to leave tools within sight, you can reduce the odds that they may be stolen.
It may also be worth training your employees - or any subcontractors who work with you - to always place unused tools in your work van or a lockbox whenever they're not in use.
Tool theft is random, meaning even if you take all the proper precautions, you might still be a victim.
But if you use the above steps - including covering your tools with business insurance - you can reduce the odds that 1) your tools will be stolen; and 2) you'll be financially impacted by tool theft.
Hope this advice helps!
I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated reinsurance carrier by A.M. Best. Harborway Insurance is a trade name of Simply Business, Inc., which is a licensed insurance producer in all 50 states and the District of Columbia.