(Feature Image: Hired in plant insurance)
Hiring equipment is part of everyday operations for many builders, civil contractors and trade businesses. Whether it’s an excavator for a short job, a truck during a busy period or access equipment for a specific site, hiring machinery helps businesses scale up when projects demand it.
Once a hire agreement is signed, responsibility for the equipment usually sits with the hirer while it’s in their care. This is where hired in plant insurance can come into play.
Why Hire Agreements Usually Require Insurance
Even though the hire company may hold its own insurance for the machinery, most equipment hire agreements contain clauses that make the hirer responsible for damage or loss while the equipment is on hire.
This responsibility often applies even if the damage occurs:
- On a construction site
- While the equipment is being transported
- When operated by employees or subcontractors
- Due to fire, theft or vandalism
In practical terms, if a hired excavator is stolen from site or damaged during operation, the hire company will usually look to the business that hired the machine to cover the cost. Depending on the equipment involved, those costs can be significant.
For this reason, many hire companies require businesses to show evidence of insurance before equipment is released.
How Hired In Plant Insurance Works
Hired in plant insurance is designed to cover equipment your business hires from another company while it is in your possession or under your control.
Unlike plant and equipment insurance, which covers machinery you own, hired in plant cover is structured to respond to risks associated with equipment that has been hired for a project.
Policies may respond to certain events such as:
- Accidental damage to the hired equipment
- Theft from a construction site
- Fire or storm damage while the machine is on hire
- Damage during transport
Because coverage depends on the policy wording, it’s important the insurance reflects the obligations in the hire agreement.
(Image: Regular equipment hiring)
What This Can Look Like On Site
A common situation where hired in plant insurance becomes relevant might look like this:
A civil contractor hires an excavator for a three-week project. During the job, the machine is damaged while operating on site.
Under the hire agreement, responsibility for that damage usually sits with the hirer while the equipment is in their care. If hired in plant insurance is in place, the policy may respond to the repair costs, subject to the terms, limits and excess.
Without insurance, the contractor may need to cover the repair costs directly.
Blanket Hired In Plant Policies for Ongoing Hire
For businesses that hire equipment regularly, arranging cover every time machinery is hired can quickly become impractical. In these situations, many construction businesses consider a blanket hired in plant policy.
Rather than insuring individual items each time equipment is hired, a blanket policy is structured to cover multiple items of hired machinery across the year.
This can be particularly useful for businesses that frequently hire:
- Excavators and earthmoving equipment
- Trucks or commercial vehicles
- Access equipment such as scissor lifts or boom lifts
- Site machinery and specialised construction plant
With a blanket policy, you nominate a maximum value for equipment hired at any one time. Equipment hired within that limit may be covered while it is on hire.
(Image: Blanket hired in insurance policy)
Why Some Contractors Avoid Hire Company Insurance
Many equipment hire companies offer their own insurance as part of the hire agreement. While this can be convenient for short hires, contractors who hire equipment regularly sometimes find these charges add up over time.
Instead, some businesses arrange hired in plant insurance as part of their broader insurance program so equipment hired from multiple suppliers can potentially be covered under a single policy.
This can be relevant for contractors regularly hiring machinery or site equipment from equipment hire companies such as Coates, Kennards Hire, City Hire, Master Hire or similar providers. The key consideration is ensuring the policy meets the insurance requirements outlined in the hire agreement.
Things Contractors Should Check Before Hiring Equipment
Before signing a hire agreement, it’s worth reviewing a few key details. Hire agreements often set out the hirer’s responsibilities for the equipment while it’s on hire and these obligations can vary between providers.
Contractors should consider:
- The value of the equipment being hired
- Whether the hire agreement requires insurance
- The responsibilities placed on the hirer for damage or loss
- Security requirements for equipment left on site
- Transport and operator obligations
Understanding these factors before equipment arrives on site can help avoid unexpected costs if something goes wrong.
Do You Need Hired In Plant Insurance?
If your business regularly hires machinery or equipment for projects, it may be worth reviewing how those items are insured while they’re on hire.
Many hire agreements place responsibility for damage or loss on the hirer while the equipment is in their care. For contractors who hire equipment frequently, this exposure can add up quickly across multiple projects.
Understanding how hired in plant insurance fits within your broader insurance arrangements can help ensure the risks associated with hired equipment are properly managed.
Understanding Your Options for Hired In Plant Insurance
Construction and contracting businesses rely on hired equipment every day and insurance arrangements often need to reflect the realities of how projects operate.
At Insuregroup, we work with builders, contractors and civil businesses across Australia to review insurance arrangements for hired machinery and plant equipment.
If your business regularly hires equipment or wants to better understand how hired in plant insurance works, you can speak with our team to review your options or request a quote based on the equipment you commonly hire.