Taking a Tax right-off for depreciation is for sure a dead giveaway that you're making money from them, but in theory at least, you're supposed to be putting money aside for tool replacement once the tools have been worked to death.
The above shouldn't affect the Insurance as you chose to pay a higher premium for the added value of REPLACEMENT COST insurance. If they had an issue the (the Insurer) should have made their conditions clear before they entered into an agreement with you. This is why I only buy from a Broker, not directly from the Ins. Co. I tell my Broker what I need and why, and let him sort out the fine print, shop it around, and come back to me with a policy I can live with.