Business equipment insurance protects your essential tools, machinery and tech against theft, damage and loss, helping you stay operational and avoid expensive downtime.
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Your equipment, machinery and tools are a vital part of your business. Without them, you can’t operate, so it’s important to make sure you have adequate coverage in place to protect your key equipment and the main tools of your trade.
Let’s look at what business equipment insurance is, how it protects your important business assets and the best options for insurance policies.
Business equipment insurance is specialised insurance that protects your business tools, machinery and tech against theft, loss, or damage.
If you work in an industry or sector where you rely heavily on physical equipment and tools, business equipment coverage is a must. If you’re a tradesperson, broken, lost or stolen tools can cause significant disruption to your operations. That means missed jobs, lost revenue and the subsequent impact on the company’s cash flow levels.
Having insurance means you can make a claim for any damaged or missing gear, providing you with the cash to repair or replace the equipment.
Insurance payouts can take time to be ratified and paid out, however, so sometimes it can be practical to take out a short-term business loan until the money is paid out.
If your insurer is taking a long time to pay out, an iwoca Business Loan offers flexible, short-term finance to help you replace essential equipment quickly.
As with any business insurance policy, it’s important to understand what your business equipment policy includes and the types of equipment that will be covered.
A business equipment policy will offer coverage of your key equipment, should it be damaged, lost or stolen. The specifics of what’s covered will be outlined by the insurer in the policy small print. Be sure to read this, so you understand which tools are covered and whether more generic office equipment is also covered.
Typically, a standard business equipment insurance policy will cover:
Some general business insurance policies do include equipment protection, but not always at full replacement value.
Always read the terms and conditions of the policy and check your policy limits. You could also consider taking out separate equipment cover for high-value items that aren’t covered by your general business insurance.
Yes, there is a key difference between these two common types of insurance.
Business equipment insurance will typically cover larger business assets that are kept on-site at your premises . This will usually be for higher-value assets such as computers or specialised machinery that’s vital to the running of the business.
Tools insurance focuses on coverage of portable work tools; things like spanners, hammers, electric drills and other tools that are essential to your trade when you’re on the go and delivering your services outside your main premises.
Many businesses will need both types of insurance.
For example, if you’re a carpentry business, you may need equipment insurance to cover the machinery, like lathes and jigsaws, that you use on-site. But you’ll also need tools insurance to cover saws, planes and screwdrivers etc. that you use off-site when installing the finished product.
Yes, you’ll need both equipment insurance and tools insurance if you operate across locations or carry equipment between jobs. Tools and equipment are usually insured separately but can be bundled under one business policy for convenience.
Most insurers will provide quotes and prices that are tailored to the specific situation, requirements and coverage needed for your business.
A smaller, one-person plumbing business will usually have smaller equipment insurance premiums than a larger construction business with multiple equipment assets and a large number of tools, used by multiple employees.
Let’s take a look at an example of business insurance prices from Swinton Insurance, an established and trusted insurer in the UK market.
Swinton’s business equipment insurance also covers tools insurance and can be added to their Tradesperson insurance policy as an optional extra. Packaging coverage together is a great way to bring down the cost of your premiums.
The final price you end up paying for your business insurance will come down to a number of contributing factors.
Factors to consider include:
The total replacement value of the insured equipment (laptops, servers, furniture, etc.) is the primary cost driver. A higher total value directly increases the insurer's maximum potential payout. This, in turn, increases the price of your premium.
Certain industries face higher risks; for example, a business using specialised laboratory equipment or operating heavy machinery will pay more for its insurance than a standard marketing agency using only office IT equipment.
Insurers will assess the physical security of your premises, including your alarms, surveillance and secure entry systems. The better the security, the lower the risk of theft or damage and the lower your annual premium.
If you have a history of frequent or high-value claims, this can signal an increased risk to the insurer. If you have a clean claims record, this will typically mean you can benefit from lower renewal premiums and better rates.
Most insurers will give you the option to pay for your insurance either on an annual or monthly basis. There are benefits to both options.
Let’s look at an example of what this looks like in real terms:
Opting to pay annually will certainly save you money, but the hit on your cash flow can sometimes prevent cash-poor businesses from choosing this option.
One way to get around this restriction is to take out a short-term business loan. Taking out a flexible iwoca Business Loan gives you the liquid cash needed to pay the upfront costs of the larger annual premium.
In insurance, there are no true ‘average prices’. The amount you pay for business equipment insurance will be determined by specific factors, such as the size of your business, the amount of equipment covered and the location of your premises.
However, based on our Swinton’s Insurance example prices, the average price would work out to approximately £134 per year (and around £12-£13 per month once you account for the higher, interest-driven costs of paying monthly).*
NOTE: Always get specific quotes from a range of insurers to understand the exact costs of taking out a business insurance policy.
Choosing a business insurance policy is an important decision. Having the ideal coverage keeps your equipment and tools protected but without the cash flow pressure of taking on annual or monthly payments that you can’t afford.
Before you sign on the dotted line with the insurer, take the time to consider all of the following factors:
Business equipment insurance is a vital element of protection for your business. But payouts following a claim can often take time to settle and be paid.
If you’ve suffered an unexpected equipment loss and need to replace it faster than your insurance can pay out, a flexible iwoca business loan can help you access the capital you need quickly and transparently.
And best of all, you can repay early any time to control your interest costs once your insurance reimbursement clears.
Apply for an iwoca Business Loan
*prices and policy details are correct as of November 2025
