There are plenty of cheap tools out there, like cordless drills, but you'll also find options that cost a lot more. You certainly don't want to eat those losses if some, or even all of that equipment gets stolen or damaged in an accident. That's exactly why tool insurance exists. That brings us to one major rule here: Tool insurance only applies to stuff that's portable – both handheld and heavy — like hand tools, power tools, ladders, and generators. Often, these policies are included as part of handyman insurance packages as a component, but plenty of insurers also sell them on their own.