Guide
Insuring Your Owned & Hired-In Plant & Machinery
Without your machinery, you can’t do your job, it’s that simple. None of us can predict what the future holds, but whether you own your own machinery or hire it in, the right insurance will give you the essential cover you require.
Words by: Auto Trader
Published on 22 August 2019 | 0 min read
Know the risks
There are a number of risks that are inherent in the construction industry, which unfortunately could mean your plant machinery is vulnerable.
Every year, an estimated £70 million worth of equipment is stolen. Even if you have security installed, construction sites can still fall prey to vandalism or theft. Of course, the more you bolster your security provision the more you mitigate the risk but it can never be completely eliminated. Construction machinery faces risks that are hard to guard against, for example, weather-related damage when the equipment is left out in the open. If you can store your machinery indoors, this can mitigate the risk, but this is not always practical or viable. While major advances have been made in recent years in terms of site safety, construction sites are, by nature, hazardous environments with a high risk of accidental damage to equipment. This is why plant machinery insurance is a necessity - you can never completely guard against the possibility of theft and malicious or accidental damage to your equipment. Your insurance policy should protect you against the risk of unexpected losses, whether you own the equipment in question or hire it out on a project-by-project basis.
Every year, an estimated £70 million worth of equipment is stolen. Even if you have security installed, construction sites can still fall prey to vandalism or theft. Of course, the more you bolster your security provision the more you mitigate the risk but it can never be completely eliminated. Construction machinery faces risks that are hard to guard against, for example, weather-related damage when the equipment is left out in the open. If you can store your machinery indoors, this can mitigate the risk, but this is not always practical or viable. While major advances have been made in recent years in terms of site safety, construction sites are, by nature, hazardous environments with a high risk of accidental damage to equipment. This is why plant machinery insurance is a necessity - you can never completely guard against the possibility of theft and malicious or accidental damage to your equipment. Your insurance policy should protect you against the risk of unexpected losses, whether you own the equipment in question or hire it out on a project-by-project basis.
Contract works insurance
You need to make sure your plant machinery is covered by a contract works insurance policy. Contract works insurance should cover you in the event of your equipment getting accidentally damaged or stolen, along with on-site equipment and equipment that is in transit.
These policies often have a set limit; a maximum amount that the contract works insurer pays out in the event of a loss. This should make life a little easier, as you don’t need to specify exactly what plant and machinery you want to cover. The value of repair or replacement just needs to fall below the set limit. There is usually an excess, which you will need to pay, on each claim. The more you agree to pay in excess, the lower the cost of your policy. This can reduce your operational overheads, however, make sure the excess doesn’t come back to bite you if you need to make a claim.
These policies often have a set limit; a maximum amount that the contract works insurer pays out in the event of a loss. This should make life a little easier, as you don’t need to specify exactly what plant and machinery you want to cover. The value of repair or replacement just needs to fall below the set limit. There is usually an excess, which you will need to pay, on each claim. The more you agree to pay in excess, the lower the cost of your policy. This can reduce your operational overheads, however, make sure the excess doesn’t come back to bite you if you need to make a claim.
Owned & hired-in plant & machinery: What’s the difference?
While some contractors are lucky enough to own their plant, other firms may choose to hire in machinery for each specific project rather than buying it all.
Whether you own the equipment or hire it in, it still needs to be insured. Often when hiring equipment, the hire company will offer insurance. While convenient, this is rarely the best option. Hire companies’ insurance tends to be more restrictive in its cover than you can expect from a contract works policy. For example, accidental damage cover is usually excluded. When you insure hired-in plant and machinery yourself, you have much greater control over the cover your receive, which could save you money in the long run. Hire companies will expect you to present evidence of your insurance policy. If they do, simply show the hirer your insurance policy documentation.
Whether you own the equipment or hire it in, it still needs to be insured. Often when hiring equipment, the hire company will offer insurance. While convenient, this is rarely the best option. Hire companies’ insurance tends to be more restrictive in its cover than you can expect from a contract works policy. For example, accidental damage cover is usually excluded. When you insure hired-in plant and machinery yourself, you have much greater control over the cover your receive, which could save you money in the long run. Hire companies will expect you to present evidence of your insurance policy. If they do, simply show the hirer your insurance policy documentation.
Continuing hiring charges: Know your responsibilities
If you have hired a piece of machinery which is later damaged or stolen, it’s important to note that you are legally responsible for paying any continuing hire charges. Even if the equipment is off-site or unable to function, the hirer will (usually) still expect to be paid. A contract works policy, could cover you here - look for one with continuing hire charges included, so if something goes wrong, you can pay them.
Whether you own your equipment or choose to hire it out, it’s essential to understand the differences your choices in insurance policy can make. Make sure that you have the right policy to suit the unique needs of your operation!
Whether you own your equipment or choose to hire it out, it’s essential to understand the differences your choices in insurance policy can make. Make sure that you have the right policy to suit the unique needs of your operation!