There’s nothing more fundamental than technicians and tools in the support and service of fleet trucks and trailers. A major question has arisen about the fact that many (more than 90%) tool collections are not insured, even though many are valued at $50,000 or more. Reasons for not insuring are varied, including the “it just won’t happen to me” mentality.

To judge the market on the need for insurance, this writer asked key fleet management and dealers for their input and best practices. Also questioned were members of the Fleet Maintenance Professionals group on LinkedIn.com, from which more than 47 candid responses were tallied as noted here:

“Technicians are serious professionals with a life-long investment in their tools,” said Jim Bradanini of Pro-TEC Tool Coverage, with 1,200 policyholders in the U.S. and Canada, underwritten by Great American Insurance Co. “They deserve the coverage and the peace of mind. It’s inexpensive for the coverage—$500 (per annum) for $50,000 coverage. Plus we provide blanket coverage for unscheduled tools.”

According to Bradanini, technicians have limited coverage of their tools on their employer’s insurance policy, and none on their homeowner’s policy. “Many technicians are not aware that their existing coverage levels are insufficient. With the right clause, technicians are covered in the event of a loss even when their tools cannot be replaced for 30 days.”

“Technicians are expected to have their own general hand tools when they hire in,” said Scott Pearson, president, Peterbilt of Atlanta, Jackson, Ga. The dealership provides the more specialized tools for technicians to use and return to the tool room. “Insurance is an optional coverage in our Garage Keeper policy.”

An insurer of 1,000 individual repair shops, Keith Friedlander, Lloyd Keith Friedlander Partners, Huntington, N.Y., said, “Tools are the technicians’ life-blood, and less than 2% insure their tools, many relying on their employer/fleet owner.

“Technicians take good care of their tools,” he added. “Informed technicians know that personal homeowners insurance won’t cover their tools. Technicians with a single employer can consolidate, purchase as a group and save money.”

Pete Nativo, Oakley Transport, noted, “We don’t replace lost or stolen tools if one item ends up missing. We urge our mechanics to complete the TMC tool inventory form at their hiring date so the record is complete.”
Kirk Altrichter, Gordon Trucking, stated, “We have a 24-hour security and camera surveillance system to help protect their [technician] property. We insure the building and contents against fire but don’t provide separate insurance for the technicians to purchase.”

Lee Long, Southeastern Freight Lines, said, “Our technicians should insure their tools on their own. If we damage it while in the shop, that’s another story.”

Bob Hamilton, Bozzuto’s, noted, “We provide a tool allowance program to help support their tool usage. We’re creating a company tool crib for all the crew to use.”

Several fleet owners reported their operations cover the tools for theft. Theft is a burglary/robbery, not “someone took my tools from my unlocked box when I went to lunch.”

Candid comments from technicians included:
“Our insurance plan covers most of the tools/equipment in the shop. Sometimes it’s cheaper to self-insure some things than pay a huge premium for multiple years.”

“We provide technicians with their tools. We conduct monthly inventory and the employee is responsible for any lost or broken tool due to mis-use since we provide a reputable brand of tools.”

“After 30 years, I’m very proud of my tools. The companies just don’t have sufficient coverage. It’s difficult and costly to get insurance.”

“Theft of tools is a bigger issue than a loss due to forgetfulness. A shop should develop an honor system.”

“Technicians justifiably take great pride in their tools, and it’s just smart business for them to protect their treasured collections,” summarized Pro-TEC’s Bradanini. An inventory sheet, complete with dates, receipts and pictures is recommended, but not mandatory.

References: www.mechanicsinsurance.com or www.lkfpartners.com. TMC technician tool inventory form at www.ATABusinessSolutions.com.