Forklifts are among the most commonly under-insured assets in Australian business. They are usually unregistered, they rarely leave the yard, and because of that they often end up on no schedule at all.
Three Different Exposures
- Damage to the forklift itself — collision, tip-over, fire, theft.
- Damage the forklift causes — racking, walls, doors, other vehicles, and the goods being moved.
- Injury — to your workers, which is workers compensation, and to visitors or contractors, which is public liability.
No single section covers all three. The machine sits under forklift and plant cover; what it damages sits under liability; injury sits elsewhere again.
Is It Covered by the Building or Contents Policy?
Sometimes, and usually badly. Contents sections may include plant “in the premises” up to a sub-limit that bears no relation to what a replacement machine costs. Worse, cover often stops at the boundary of the premises — which matters the moment the forklift crosses a road, loads a truck at the kerb, or goes to another site.
The Off-Premises Question
Ask three questions about any forklift:
- Does it ever leave the yard, even briefly?
- Is it ever transported to another site, and who moves it?
- Is it ever operated on a public road or footpath?
Each of those changes which policy responds, and some wordings exclude the machine entirely while it is in transit.
Operators and Licensing
High risk work licensing applies to most forklift operation in Australia. Many policies contain conditions requiring that operators hold the correct licence and follow the manufacturer’s instructions. An unlicensed operator is both a work health and safety problem and a potential coverage problem.
What About Hired or Leased Machines?
Rental agreements usually make the hirer responsible for damage. Hired-in plant cover deals with that, and it should reflect the value of the largest machine you might have on hire, not the average one — see plant and equipment insurance.
Attachments Count
Slippers, jibs, rotators, clamps and cages carry real value and change the machine’s risk profile. List them, and tell your insurer if the machine is used for anything other than standard pallet handling.
The Claims That Come Up Most
- Racking collisions. A struck upright can bring down a bay of stock, and racking damage frequently exceeds the forklift’s own value.
- Load damage. Tines through a pallet of goods, particularly where the goods belong to a customer.
- Tip-overs. Usually loading, turning with a raised load, or uneven ground at a delivery point.
- Loading dock incidents. A truck pulling away while the forklift is still on the tray is a recurring and expensive event.
- Pedestrian injury. The most serious category, and the reason traffic management plans exist.
Care, Custody and Control, Again
When a forklift damages goods it is carrying, those goods are in your physical control — and standard liability wordings commonly exclude property in your care, custody or control. Businesses that handle customer-owned goods should look specifically at whether that exclusion has been bought back, and to what limit. It is the difference between a covered loss and an invoice.
Practical Risk Controls Insurers Notice
- Documented traffic management separating pedestrians from plant.
- Pre-start checklists, kept rather than discarded.
- Licence register with expiry dates.
- Speed limiters and blue safety lights in shared areas.
- Racking inspections after any impact, by a competent person.
- A charging area that meets ventilation and fire requirements.
Common Questions
Does the forklift need registration to be insured?
No. Unregistered plant is insured under plant and equipment rather than motor, provided it is on the schedule.
Who pays if the forklift damages a customer’s goods?
Usually liability cover, subject to the care, custody and control provisions — which are worth reading, because goods in your control are often excluded or sub-limited.
Are electric forklifts treated differently?
The exposures are similar, though battery charging areas raise fire questions that a good broker will ask about.
Talk It Through
Request a quote or call 1300 983 940 and we will check whether the machine is actually on a schedule.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.