Wet hire means the machine comes with your operator. Dry hire means it goes out on its own. That single difference reshapes the insurance position for both parties, and it is the source of a great many arguments after a loss.
Wet Hire: the Exposure Stays With You
With your operator in the seat, you retain control of the machine and of how the work is done. In practice that means:
- Damage to the machine remains your problem, under your plant cover.
- Damage the machine causes is generally your liability — so the limit on your public liability policy matters.
- Your operator’s training, tickets and fatigue management are part of your risk.
- Injury to your operator is a workers compensation matter.
Dry Hire: Responsibility Follows the Agreement
On dry hire, the hirer takes possession and normally accepts responsibility for the machine while it is in their control — but only to the extent the hire agreement says so.
- The agreement should require the hirer to insure the machine for its full value, and to note your interest.
- It should deal with damage, theft, misuse and who pays the excess.
- It should confirm the hirer’s liability cover and its limit.
- Ask for the hirer’s certificate of currency before delivery, not after.
An unsigned agreement, or one that was never handed over, leaves you carrying a loss you thought you had passed on.
Hired-In Plant Works the Other Way
If you are the hirer, the reverse applies: you are usually responsible for a machine you did not buy. Hired-in plant cover exists for exactly that, and the sum insured needs to reflect the most expensive machine you might ever have on hire, including at peak.
The Grey Areas That Cause Claims
- Machines hired dry but operated by your people “just for a day”. Control moves back to you, and cover may not follow.
- Delivery and pick-up. Who insures the machine on the float, and while it is being loaded?
- Attachments. Frequently hired separately and forgotten in the schedule.
- Continuation past the agreed term. An expired hire agreement can leave nobody clearly responsible.
- Subhire. A hirer passing the machine on again without telling you.
What Good Practice Looks Like
- Written hire agreement, signed before the machine leaves.
- Certificate of currency from the hirer, checked for entity, limit and dates.
- Photographic condition report at both ends of the hire.
- Serial numbers and attachments listed on the docket.
- Your interest noted on the hirer’s policy where the machine is high value.
Labour Hire Sits in Between
A third arrangement causes more confusion than either: supplying an operator to work on someone else’s machine, or taking on a labour hire operator to run yours. Control is split, and so is responsibility.
Two questions decide most of it. Who directs the work — that usually determines liability. And whose worker is the operator for workers compensation purposes — which in several states can extend to people you did not think were your workers. Both should be settled in the agreement, in writing, before the first shift.
What the Hire Agreement Should Actually Say
- Who bears the risk of loss or damage, and from what moment — collection, delivery or handover.
- The insurance the hirer must carry, the limits, and a requirement to provide a certificate.
- Who pays the excess, and what happens if the hirer’s insurer declines.
- Whether subhire is permitted at all.
- Return condition, fair wear and tear, and how damage is assessed.
- Continuing hire charges while a damaged machine is repaired.
That last point is frequently missed. If a hired machine is written off, the owner loses the hire income as well as the asset, and only some policies respond.
Personal Property Securities Register
Where machines go out on hire for extended periods, registering your interest on the PPSR protects your position if the hirer becomes insolvent. It is not insurance, but it belongs in the same conversation — insurance covers the damage, registration protects the ownership.
Common Questions
Does my plant policy cover a machine while it is dry hired out?
Some do, some exclude it, and some cover it only while a compliant hire agreement is in force. This is worth confirming in writing.
If the hirer damages it, whose excess applies?
Whoever’s policy responds. That is one more reason to be clear about which policy that is before the machine goes out.
Is wet hire more expensive to insure?
Not necessarily, but it puts more weight on liability limits and operator management than on the machine schedule.
Talk It Through
If you hire plant in or out, it is worth having the agreements and the policy read together. Get in touch or call 1300 983 940.
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.