We have insured a small contractor for a number of years, and have generally arranged coverage for the scaffolding used in the insured's operations on a scheduled basis. When another producer in the agency was renewing coverage, a small tools floater was used, rather than specifically scheduling the scaffolding. We should note that the rate for small tools and miscellaneous equipment is $3 per $100, versus a rate of $.51 per $100 for scheduled equipment.

The scaffolding was stolen from a job site, and the insurance company is denying the loss because, in its opinion, scaffolding is not a small tool.

The dictionary says a tool is "an implement used to perform a task." If the company is going to use the argument that scaffolding is not a tool, what would a painting contractor's tarps and ladders be, or a roofer's safety equipment, or a dry wall contractor's stilts?

What is your opinion?

Pennsylvania Subscriber

As you realize, this question hinges on the interpretation of what is a "small tool." There is no definition for "small tools" in the coverage endorsement; instead, there is blanket $10,000 coverage for small tools not to exceed $500 for any one tool, with a deductible of $250 per occurrence.

Two things need to be looked at here. First, the history of twenty years of covering this contractor with the same insurance company, with knowledge that covered items included scaffolding. Second, the coverage under the small tools floater must be analyzed.

We are generally of the opinion that, absent a policy definition of what constitutes a small tool, then the standard dictionary definition applies. The first dictionary definition of "tool" is a "hand held device that aids in accomplishing a task." The next definition is "something (as an instrument or apparatus) used in performing an operation or necessary in the practice of a vocation or profession."

While it might be said that a constructed scaffold ceases to be a "small tool" and becomes an apparatus, it may also be argued that the component parts of the scaffold are arguably small tools in and of themselves, and therefore qualify for coverage under the endorsement.

Because both views are reasonable, unless the policy wording clarifies, the insured deserves the benefit of the doubt. And, since the insured is paying many times over what he should be paying, the insurer is getting a bargain in premium dollars collected, which argues against the insurer's position.