Buyer's Guide to Plant Insurance

What is plant insurance?

Want to know how to best cover your own or hired-in plant equipment? Read our simple guide to plant and hired-in plant insurance, including features, exclusions and potential costs.

Plant insurance provides cover for losses incurred, for both your own plant and hired-in equipment you are using, should it be damaged or stolen.

If you have leased an item of plant, you are responsible for paying any continuing hire charges even if the equipment has been damaged or stolen so it cannot be used. Plant insurance is therefore also designed to pay the costs of continuing hiring charges you incur while the plant is replaced or repaired.

Cover is usually available both as part of a package or for individual items, starting from small portable tools up to generators and larger items such as scissor lifts and cherry pickers.

Do I need plant insurance?

Millions of pounds of plant and equipment is stolen from construction sites each year, and vandalism is also a significant problem. When equipment is kept outside damage from the elements is also a significant risk, and given construction sites are by their nature potentially hazardous environments, there is always a chance of plant and machinery suffering accidental damage.

Furthermore, if you have leased plant equipment, you have an agreement with the hiring company which makes you responsible for the plant while it is in your control. If it suffers theft or damage, you would be legally liable to replace the plant, which you may not have the money to do. On top of this, you have a financial responsibility to continue paying any leasing charges for hired-in equipment even while it is damaged or stolen, until is repaired or replaced.

Therefore, whether have your own plant or have hired equipment, plant insurance is crucial to protect you and your business protects you should the plant be stolen or damaged.

What does plant insurance cover?

Plant insurance can cover you against malicious damage, theft, fire, storm, flood and water damage for both your own or hired-in equipment. This includes both while the equipment is at the worksite, and transfer of equipment to and from the worksite (within the distances stated in your policy).

Levels of cover will vary according to your policy and insurer but standard cover is available up to at least £100,000. Higher limits are also available in tailored, bespoke packages.

Should your hired-in plant be damaged or stolen, you will need to pay continuing hiring charges until the equipment is replaced or repaired. Plant equipment is designed to also cover this expense.

How much does plant insurance cost?

There are a wide range of plant insurance policies available, as part of a single package, separately for a set of equipment, or even for just a single item. While it is therefore difficult to give an average cost, there are ways to keep your premiums lower, including:

  • Extra security for your equipment, such as CCTV
  • Keeping it under cover to protect it from the elements

If you hire equipment frequently, the most cost-effective method is usually to take out an annual plant insurance policy. This will cover any equipment you hire during that time against damage and theft and will invariably be cheaper than purchasing a separate policy each time you need to rent an item of plant.

Note also that plant leasing firms will offer insurance to cover their equipment if it is damaged or stolen. However, this is usually more restrictive cover than a plant insurance policy (often excluding accidental damage cover, for example), so could turn out to be far more expensive in the long run.

Things to consider when choosing your plant insurance policy

As noted above, while you may be able to take out a hired-in plant insurance policy direct from the leaser, by insuring the machinery yourself, you will be able to get more extensive cover to suit the needs of your business.

Some plant insurance policies may carry an excess that you need to contribute towards each claim. You can reduce your premium by agreeing to a higher excess, but note you would need to pay a larger sum in the event of a claim.

Plant insurance exclusions

As with all covers, plant insurance policies vary by insurer and customer, so you should always check your policy documents carefully for a comprehensive list of any exclusions.

Plant insurance from Towergate

Whether you have your own or need to lease-in plant equipment, it is worth investing in plant insurance to ensure it is protected. Visit our plant insurance webpage or call us on 0344 346 0409 to speak to an adviser.

About the author

Mike Stephens FCII is a respected senior industry professional and Fellow of the Chartered Insurance Institute (CII) with well over 40 years’ varied experience in the commercial insurance sector as a director, underwriter, and operational improvement manager.