What’s The Difference Between Plant-Owned & Hired-In Machinery For Insurance?

Insurance for plant and machinery used in the construction business can be a confusing topic. Many construction bosses will wonder if their digger hire insurance, for example, will cover them should the digger get stolen while on site because most construction sites tend to be out in the open.

They may have insurance for excavators the company owns but also pay for daily plant hire insurance to cover any hired plant machinery they need for the job that the construction company don’t own.

There are many risks involved with construction plant machinery due to the environments in which they are used. Plant equipment worth £70 million is stolen from construction sites each year in the UK, and this doesn’t include vandalism of machinery, which is also a significant issue.

You can boost the security of your construction site to help protect your machinery, but it will not eliminate the risk of theft or vandalism. This is why construction companies must have the right plant & machinery insurance in place.

What Is Plant Insurance?

Plant machinery insurance coverage protects construction firms against the risks of keeping their plant machinery out in the open. While you can minimise risks to your property by taking appropriate security measures, if you keep your construction machinery on-site, it will never be as safe as if you kept it locked up in a building such as a secure warehouse.

Even though huge strides have been taken over the years to revise and improve health and safety risks on construction sites and in the building industry in general, these workplaces are still hazardous to workers and visitors, so the chances of accidents and damage to machinery and equipment will remain high.

This is why plant machinery insurance was devised to help protect you against physical damage or theft to your construction machinery and against any unexpected losses. Plant insurance is essential whether you own the equipment in question or have hired it from a plant hire company to use it on a construction project.

What Does Plant Insurance Cover?

Plant and machinery insurance is invaluable if you have leased an item. You will be responsible for paying ongoing costs and hire charges for your hired plant even if the machine or equipment gets stolen off-site or damaged, meaning it cannot be used.

Plant insurance is designed to cover your costs while the stolen plant is replaced or the broken plant is repaired back to working order. You can get plant insurance coverage for a whole package of plants you lease from a plant hire company or for individual items you hire, starting from portable tools to more oversized items, such as power generators, cherry pickers and scissor lifts etc.

Does Plant Insurance Cover Owner & Hired-In Equipment?

While owned plant insurance coverage will protect all the machinery and tools your construction company owns outright, if you have a mixture of owned and hired-in equipment, you need to cover yourself against the costs of losses and damage to this hired equipment too.

Plant insurance can protect you against theft, malicious damage, fire, flood, storm and water damage for your owned and hired-in construction machinery and equipment. Your insurance cover will protect your equipment at the construction site and during any movement and transportation of equipment between work sites or construction sites and a base/head office as specified in your policy.

The level of plant insurance cover you take out can vary according to your needs, but most standard plant machinery and equipment cover are available up to at least £100,000. Higher limits are also available by special arrangement.

Do I Need Specialised Insurance For Hired-In Plant Equipment?

While standard levels of plant insurance may provide you with enough cover to replace any stolen or damaged plant that you own outright, you need to consider the extra costs that come with hired-in plant machinery and equipment that will require additional insurance coverage.

If your hired-in plant gets damaged or stolen, you will still be expected to pay your ongoing equipment hire charges until you get a replacement plant or the broken equipment is repaired. You can tailor your plant insurance policy to include the extra expenses of hiring plant equipment.

It is also a standard part of your leasing agreement with your plant hire company that you will be responsible for the plant while it is under your control. Should it be stolen or damaged, you would be legally liable to replace the stolen or broken plant, which you may not be able to afford without adequate plant insurance coverage in place.

Therefore, no matter if you own your plant outright or have a mix of owned and hired-in plant equipment, it is crucial to protect your construction firm with the right amount of insurance.

How Much Does Hired-In Plant Insurance Cost?

The price of hired-in plant insurance is subjective. The cost of your policy will depend on your coverage and whether you prefer to insure your plant as part of a single package, separately by individual item, or for a set of equipment leased from one plant hire firm.

While there is no one-size-fits-all plant insurance solution, there are ways to keep premiums lower, including;

• Choose an annual plant insurance policy to lower costs
• Carry out simple security checks and consider installing CCTV for extra security
• Keep plant machinery under cover to protect it from the weather

If you regularly use hired-in plant equipment, the most cost-effective way to keep your insurance costs down is to take out an annual plant insurance policy in the UK. This will protect any plant equipment you hire during the duration of the policy against damage and theft and usually works out cheaper than buying individual insurance each time you need to cover a piece of plant.

What Should I Consider When Choosing Plant Insurance For My Business?

There are a few things to consider before you take out plant insurance to cover your needs. These include:

1: Plant Insurance Exclusions

As with all insurance covers, plant insurance policies will vary by insurer and type of customer, so you should always check your policy documents carefully for a comprehensive list of any exclusions that you may not be able to claim against. These can include:

1. Certain Types of Equipment: Sometimes, your insurer may not be willing to insure specific equipment used on a construction site. It can help to shop around and check policy details to find the cover you need to ensure all of your plant machinery and equipment.
2. Ensure You Cover Both Hired-In and Owned Plant Equipment: If you have always used your own plant equipment, your insurance may not provide enough coverage to protect against the risks associated with leasing hired-in plant, such as ongoing rental costs etc.

2: Plant Insurance Excess

Some plant insurance policies carry an insurance excess you need to pay with each claim you make. You can reduce your insurance premium by agreeing to a higher excess, but remember that by doing this, you would need to pay a more significant sum in the event of a claim.

3: Ways You Can Lower Your Plant Insurance Costs

There are ways to reduce your plant insurance costs, such as taking out a yearly policy to reduce premiums as mentioned above, and:

1. Improve Plant Security: Add CCTV and lock up tools and equipment securely
2. Potentially Swap From Owned to Hired-In Plant Equipment: It can work out cheaper in some cases to entirely hire in all the plant machinery and equipment you need and cover it all with one plant insurance policy rather than having a mixture of owned cover and individual tool cover for hired-in equipment.

Conclusion

The best way to find the most cost-effective plant insurance coverage to meet your needs is to work with a specialist insurance brokerage firm, such as Brisco Business, to compare quotes from leading UK insurance providers.

Our highly experienced business insurance brokers can help build the perfect plant insurance policy to meet your needs, regardless of whether you regularly hire-in plant equipment or are considering doing this for the first time. As a business owner, it’s crucial to have a disaster recovery plan in place. Let Brisco Business assist you with business insurance solutions that align with your recovery strategy.

Dean Laming

Dean is a Chartered Insurance Broker with more than 25 years insurance experience. Through various underwriting, operational and management roles, Dean has built up extensive knowledge of how to run a business and is now Managing Director of Brisco Business, part of the wider Henry Seymour Group.

All articles by Dean Laming