If you work in construction, then you know that machinery is one of your most important – and expensive – assets. Damage or theft can result in costly delays and repairs. Multiply that by every piece of equipment your firm uses, and you start to get an idea of exactly how high those expenses might rise.
This is where insurance comes in. You are likely already familiar with other policies, covering everything from legal fees to workplace injuries. But did you know you can also insure your equipment? And it might be more beneficial than you think.
What is Plant and Machinery Insurance?
Plant and machinery insurance – also called plant and motor insurance, business equipment insurance, and mobile plant and equipment insurance – is a policy designed to provide coverage for essential tools and machinery used in your construction projects. This equipment is often subject to intense pressure and high workloads, which can result in damage. Insurance helps cover the costs associated with this outcome.
What Does It Cover?
A construction equipment insurance policy typically covers:
- Accidental Damage: Covers repair or replacement costs if your equipment is damaged due to an accident on-site or in transit.
- Theft or Vandalism: If your machinery is stolen or intentionally damaged, the policy may assist with replacement costs or repairs.
- Fire and Natural Disasters: Protection against damage caused by fire, floods, storms, or other natural disasters.
The exact coverage details will vary depending on your insurance provider, so it is crucial to review the policy you’re applying for.
Do I Really Need Construction Equipment Insurance?
To answer this question, you must ask yourself another: How much money is currently in your business accounts?
A single piece of construction equipment can cost upwards of $50,000 – and chances are, you own more than one. Accidents can happen at any moment, either on the road or at the worksite. To make matters worse, theft is more common than you might think. Unless you can afford to put hundreds of thousands of dollars aside for this eventuality, you need insurance to help cover the costs.
Will My Other Policies Cover This?
Construction firms already need many insurance policies to remain compliant with the law and account for other risks – which, understandably, may make you question whether an extra one is truly necessary. But unfortunately, other forms of insurance will not cover your equipment. Instead, they are designed for other purposes. To name a few examples:
- Public Liability Insurance: Covers third-party claims of property damage or personal injury.
- Environmental Liability Insurance: Covers damage caused to the environment, or to people as a result of hazardous material handling.
- Professional Indemnity Insurance: Covers advice given that caused damage or harm.
As is evident, none of these other policies provide any coverage for broken equipment or machinery. In order to protect this crucial area of your business, you will need specialised insurance.
How Do I Apply for Coverage?
Applying for plant and machinery insurance is a fairly straightforward process, and one you have likely already experienced. But if you are uncertain, here are the steps you should take.
Step 1: Assess Your Equipment and Risks
Before reaching out to insurers, take inventory of your equipment. List the make, model, and value of each item, along with how often it is used and the risks it faces (for example, particularly harsh weather conditions). Then make a note of its current condition.
Step 2: Choose the Right Coverage Level
Using the information you previously gathered, determine which level of coverage you need. If you use leased equipment, check with the leasing company to see if they have specific insurance requirements.
Step 3: Compare Insurance Providers
Not all providers are created equal. Research your options and compare coverage, exclusions, and premiums to find the right fit for your needs.
Step 4: Provide Necessary Documentation
Most insurers will require:
- A list of the equipment you want to insure
- Details about how and where the equipment is used
- Proof of ownership or lease agreements
- Your history of past insurance claims
Provide all documentation promptly, and keep thorough records throughout this process.
Step 5: Review and Purchase
Before finalising your policy, read the fine print carefully. Understand the exclusions, limitations, and conditions that could impact your coverage, as well as the claims process. Once you are satisfied that your needs are being met, purchase the policy. Remember to budget for premiums.
Don’t Let Broken Equipment Slow You Down
Insurance is a complex and expensive process, especially when you require many different policies. But not having the proper coverage can cost a lot more in the long run. Machinery breaks, and taking those costs into account is essential to ensure profitability. The correct mobile plant and equipment insurance will help you cover unexpected costs and stay within budget, ensuring that you’re able to operate even in the face of sudden pitfalls.
Finding the right insurance shouldn’t be another challenge. That’s why TIC offers clear, easy-to-understand policies designed to fit your unique needs. We help you find the right coverage without the hassle, so you can get back on track sooner. Ready to learn more? Get a quote.