Guide
Auto Trader Plant Presents A Complete Guide to Plant Insurance
When you run a construction firm your machinery is your livelihood, which should be protected at all costs. To help you choose the right insurance policy for you, we’ve developed this guide to insuring your plant machinery.
Words by: Auto Trader
Published on 15 August 2019 | 0 min read
When you’re working with expensive construction equipment, it’s fair to say that there’s some risk involved, including (but not limited to) theft and damage. Whether you own your plant or are renting it - repairing or replacing stolen, vandalised or accidentally-damaged machinery can be extremely expensive. Yet even this can pale in comparison to the expense and inconvenience caused by a delay in work due to lack of machinery - which will only lead to more costs and could deal a devastating blow to your professional reputation.
Plant machinery insurance can protect your business from such losses and operational setbacks. Here we’ll look into your insurance options and their limitations so that you can determine which is the best choice to protect your operation.
Plant machinery insurance can protect your business from such losses and operational setbacks. Here we’ll look into your insurance options and their limitations so that you can determine which is the best choice to protect your operation.
What is plant insurance?
Plant insurance can provide a safety net for losses incurred when equipment is damaged or stolen. It can cover your own plant’s resources and any hired-in equipment you are using.
Cover is usually fairly flexible. It tends to be available both as part of a package or for individual items. These can be anything from small personal tools to large items like cherry pickers or scissor lifts.
Cover is usually fairly flexible. It tends to be available both as part of a package or for individual items. These can be anything from small personal tools to large items like cherry pickers or scissor lifts.
Do I need plant insurance?
In a word… Yes.
Every year, construction outfits lose millions of pounds’ worth of plant and equipment to theft, accidental damage and (unfortunately) deliberate acts of vandalism. No matter how secure your site is, you can never completely discount the risk of theft or vandalism. When equipment is kept outside, it is also exposed to the risk of damage from the elements. What’s more, since construction sites are, by nature, environments that are rife with hazards, there is always the possibility of accidental damage to plant and machinery. When you lease an item of plant, you are responsible for continuing hire charges, even when the equipment cannot be used because it has been stolen, lost or damaged. It is therefore important you take out an insurance policy, which is designed to pay continuing hire costs incurred while you wait for equipment to be repaired or replaced. So, as you can see, plant insurance is absolutely vital whether your equipment is rented or you own it outright.
Every year, construction outfits lose millions of pounds’ worth of plant and equipment to theft, accidental damage and (unfortunately) deliberate acts of vandalism. No matter how secure your site is, you can never completely discount the risk of theft or vandalism. When equipment is kept outside, it is also exposed to the risk of damage from the elements. What’s more, since construction sites are, by nature, environments that are rife with hazards, there is always the possibility of accidental damage to plant and machinery. When you lease an item of plant, you are responsible for continuing hire charges, even when the equipment cannot be used because it has been stolen, lost or damaged. It is therefore important you take out an insurance policy, which is designed to pay continuing hire costs incurred while you wait for equipment to be repaired or replaced. So, as you can see, plant insurance is absolutely vital whether your equipment is rented or you own it outright.
What does plant insurance cover?
A plant insurance policy should have options which cover you against theft, fire, storm, flood and water damage as well as malicious damage both for hired and privately owned equipment. This could include both on-site equipment, and transfer of equipment to and from the site (although specific distances vary by policy and provider).
Levels of cover will vary by insurance provider and policy, so consider the cover carefully. Providers will likely prepare a bespoke package with a higher upper limit if required. As discussed previously, plant insurance can cover hire charge expenses incurred while waiting for hired equipment to be repaired or replaced - so if this is important to your business, make sure you go for a policy with hire equipment included.
Levels of cover will vary by insurance provider and policy, so consider the cover carefully. Providers will likely prepare a bespoke package with a higher upper limit if required. As discussed previously, plant insurance can cover hire charge expenses incurred while waiting for hired equipment to be repaired or replaced - so if this is important to your business, make sure you go for a policy with hire equipment included.
How much does plant insurance cost?
It varies as policies can be taken out to cover your entire plant in a single package, or separate policies can be taken out to cover a set of equipment, or even a single item.
This makes it difficult to give an accurate average cost for this multifaceted form of insurance. Nonetheless, whatever form of plant insurance works best for you, there are ways to reduce the cost of your premiums, including:
This makes it difficult to give an accurate average cost for this multifaceted form of insurance. Nonetheless, whatever form of plant insurance works best for you, there are ways to reduce the cost of your premiums, including:
- Invest in extra security for your equipment (e.g. CCTV)
- Keep equipment under cover to protect it from the elements
- Take out an annual plant insurance policy if you hire equipment often - it will invariably be cheaper than purchasing a separate policy for each rented item of plant.
Things to consider when choosing a plant insurance policy
Plant leasing companies may also offer insurance to cover their equipment against theft or damage. It’s worth noting, however, that these are usually more restrictive in their cover than a plant insurance policy - they may, for example, exclude accidental damage cover. While these options may be cheaper, it could be a false economy.
Insuring the machinery yourself will allow you to get more extensive cover to suit your needs. Just like your car insurance, some policies may carry an excess that policyholders need to contribute towards each claim. Agreeing to a higher excess may reduce your premium and place less restriction on your cash flow.
Insuring the machinery yourself will allow you to get more extensive cover to suit your needs. Just like your car insurance, some policies may carry an excess that policyholders need to contribute towards each claim. Agreeing to a higher excess may reduce your premium and place less restriction on your cash flow.
What is Contractor Plant Machinery insurance?
Contractor Plant Machinery insurance covers all physical damage done to a contractor’s machinery unless specifically excluded by the policy. This may cover accidents as long as they are not caused by gross user negligence or acts of God like storm damage or falling trees or rocks.
Payments cover the cost of repairing or replacing affected machinery at work or rest, as well as equipment on any job site owned by a third party and even when dismantled and reassembled for maintenance. Contractor Plant Machinery may not, however, cover other eventualities like;
Payments cover the cost of repairing or replacing affected machinery at work or rest, as well as equipment on any job site owned by a third party and even when dismantled and reassembled for maintenance. Contractor Plant Machinery may not, however, cover other eventualities like;
- Damage caused by user negligence
- Electrical or mechanical breakdown
- Boiler explosions
- Pre-existing defects or damage caused by the manufacturer
- Damage to vehicles on public-use roads.
As always, policies may differ, which is why it’s essential to check your policy carefully for exclusions. These can create the potential for significant losses in terms of repair costs and lost productivity.
It’s worth remembering that while pre-existing defects may not be covered by your policy, they may still be covered under manufacturer warranties. Alternatively, you may wish to cover your plant with multiple policies. The premium for Contractor Plant Machinery insurance depends on the types of machines insured, where they are used, and any other risks associated with use. Price is an important consideration, but you should also carefully review any exclusions in your policy, as these can vary enormously between policies. Consider whether you need any extensions by thinking through the costs and logistical difficulties involved when repairing or replacing a machine. Plant insurance is an extremely important consideration for construction firms. Make sure that you have the right policy to suit the unique needs of your operation!
It’s worth remembering that while pre-existing defects may not be covered by your policy, they may still be covered under manufacturer warranties. Alternatively, you may wish to cover your plant with multiple policies. The premium for Contractor Plant Machinery insurance depends on the types of machines insured, where they are used, and any other risks associated with use. Price is an important consideration, but you should also carefully review any exclusions in your policy, as these can vary enormously between policies. Consider whether you need any extensions by thinking through the costs and logistical difficulties involved when repairing or replacing a machine. Plant insurance is an extremely important consideration for construction firms. Make sure that you have the right policy to suit the unique needs of your operation!