In many cases tools are exposed to temperature fluctuations leading to cyclic plastic deformation of the thermally cycled surface. This leads to the formation of residual tensile stress which favours material damage. Modern tools are coated with special hard coatings which should protect it from corrosion and wear and which additionally have an insulating effect. However, the effect of these coatings on the development of the above mentioned residual stresses is still an open question. In order to understand these processes, measurements and simulations were conducted and compared. Both, the measured data and the simulations showed that the hard coatings had a beneficial impact on the damage behaviour of the samples. The material model that was used for the present loading conditions, did not lead to cyclic plastic deformation. In order to examine the effect of cyclic plastification the yield strength of the substrate was lowered for further calculations. The result revealed that hard coatings reduce or totally avoid plastification. The main reason for this phenomenon is the insulating effect of the hard coating leading to a lower substrate surface temperature.