Stolen Tools Case Shows Why Policy Limits Matter for Tradies

The dispute involved a business that claimed for tools and a trailer stolen from a worksite. The insurer accepted part of the claim and paid under the portable items section of the policy, along with a separate business interruption amount. However, the business argued the broader theft of contents limit should have applied, saying the stolen items were worth far more and that different worksites should be treated as business premises.

AFCA sided with the insurer. In simple terms, the decision turned on where the items were located and how the policy treated portable contents. Because the tools were away from the listed business location, the portable contents provision applied rather than the higher contents limit. The trailer was also not covered because the policy excluded certain vehicles and similar items.

For tradespeople, this is more than a technical insurance dispute. Tools are often the backbone of a trade business, and many operators move between homes, commercial sites, sheds, depots and temporary worksites every week. If the policy separates fixed-location contents from portable equipment, the difference can have a major impact on the payout after a theft.

The case also highlights the importance of evidence around advice and disclosure. The business said it had not been clearly told about the portable contents limit before buying the policy online, but AFCA found there was not enough proof that it had been misled. That is a useful warning for tradies who arrange cover quickly through digital channels: policy documents still matter, and assumptions can be costly.

Before renewing or buying Tool Insurance for Tradies, business owners should check:

• whether tools are covered at the workshop, in the ute, on site and in storage;
• the sub-limit for portable tools and equipment away from the insured premises;
• whether trailers, generators, plant or vehicles need separate cover;
• the theft conditions, including locked storage, forced entry and overnight exclusions;
• how business interruption is calculated if stolen tools stop work.

The lesson is straightforward: do not just look at the headline insured amount. Read the sections that apply to where your gear actually goes. If the wording is unclear, speaking with a broker can help identify gaps before a loss happens, rather than after a claim is reduced.