If you are a business owner that regularly needs to hire plant equipment for certain projects, it can be exceptionally frustrating when this hired equipment malfunctions, stops working, gets stolen or is lost. It can put all your progress to a standstill, causing you to lose valuable time while the problem is resolved.
But did you know that there is a way to protect yourself against issues that arise with hired equipment, and this is through ensuring that you have the proper plant hire insurance. This insurance is usually short-term and is offered by the company that you are hiring equipment from. But there are many different types of plant hire insurance policies available.
If you have a building company or work as a tradesperson, you are more than likely going to have to hire plant equipment on a regular basis, but there are many other businesses and professionals that need to hire equipment to complete projects and contracts. If you are one of these people, you should ensure that you have a good understanding of the ins and outs of plant insurance.
In this article we will take a closer look at plant hire insurance and why you need it should you be hiring equipment in the UK.
What is plant hire insurance?
Plant hire insurance in the UK is also known as hired-in plant insurance. This type of insurance policy is designed to protect business owners or individuals that have hired plant machinery and equipment. Plant hire insurance protects you should the machinery or equipment be destroyed, lost, or stolen.
Accidents can happen at any time. A breakage or theft of a piece of equipment may be the last thing you expected, but unfortunately these things can happen. Equipment can be worth a lot of money, and therefore a hot target for thieves.
Did you know that when you sign the lease agreements for hiring equipment, you are now responsible for that equipment in most cases?
If something goes wrong, plant hire insurance will cover the costs needed to replace or repair the equipment you’ve hired.
What type of machinery and equipment is considered as plant equipment?
Plant equipment is usually tangible, long-term assets, which generally have a lifespan of over 12 months, as well as a significant value. They are seen as fixed assets.
When hiring ‘plant’ equipment, you are usually hiring things like:
- Vehicles such as trucks
- Heavy machinery
- A variety of different types of equipment
- Office furniture
Why plant hire insurance is so important
Most of the time nothing goes wrong, so why is plant hire insurance so important?
Think of it this way. When you hire plant equipment and machinery from a hiring company, you are actually signing a legal business contract. When you are making use of the equipment you’ve hired, you are 100% responsible for this equipment and for keeping it in the condition that it was given to you. You will need to return it in working order without any damages.
Now imagine that a piece of equipment that you have hired breaks down, or was suddenly lost or stolen. If you decided not to take out plant hire insurance, the cost of repairing or replacing this piece of machinery would have to come from your pocket. And it’s usually going to cost a lot. This is not a position that you want to be in.
If you are midway through a project when breakage or loss occurs and you don’t have plant hire insurance, it’s possible that you may not have the cash you need available to you to fix or replace the item. This can lead to missing deadlines, unnecessary expenses, and definitely a lot of stress!
Plant hire insurance eliminates this stress by ensuring that you are covered in the case of any unwanted event that has to do with the plant equipment you’ve hired.
What does plant hire insurance cover?
There are a wide variety of different policies out there, and it is very important to know exactly what you’re covered for when it comes to your plant hire insurance policy. In most cases, plant hire insurance policies are used for when you hire things like equipment, machinery and tools.
You could have varying requirements throughout the year as you hire different pieces of equipment and undertake different contracts. It should be noted that plant hire insurance does not cover items you have borrowed or casually loaned. It will only cover items that you have officially hired, with a legal contract in place.
In most cases, there will be value limits per item. Plant hire insurance policies can usually be customised to fit your specific needs, so take your time before choosing the policy that is right for you!
How much does plant hire insurance cost?
The cost of plant hire insurance will vary greatly from policy to policy. Things that will contribute towards the cost of plant hire insurance include:
- The insurance company that you use when taking out plant hire insurance.
- The items that you want to insure and their particular values.
- The length of time that you want the insurance policy to cover (daily plant hire insurance usually costs more per day than monthly options).
- What you plan to do with the machinery you hire, and what risks are present.
Plant hire insurance can indeed be rather costly at times, and you may feel like it is just an unnecessary cost that is eating up your budget. But in the case of something going wrong, you will be very glad that you paid this extra cost as it will end up saving you time, money, and stress.
If you want to get the best insurance policy for the budget available to you, make sure you look at a few different policies. But getting the proper plant hire insurance is definitely a cost that is worth it!
How to minimise risk
While good plant hire insurance can cover you should something go wrong, you also do want to minimise the risk of something going wrong to begin with. Insurance claims can be time-consuming, and your project may stay at a standstill for a while.
A few ways to minimise risks when it comes to plant hire equipment include:
- Hire from a reputable hire company – Always hire from a company that you deem to be trustworthy. Check out their online reviews and testimonials to get an idea of the type of company that they are before hiring equipment from them.
- Make sure that the equipment you’re hiring is in good condition – You have every right to inspect the equipment that you plan to hire before you sign any lease agreements. Inspect the equipment with the hiring company, and make sure that any dents, bumps and scratches are taken note of so that you won’t be held liable for them at a later stage.
- Ensure that your staff are well trained – It may be part of your insurance policy contract that the staff using certain pieces of equipment are well trained and hold the necessary licenses. This is because it reduces the risk of something going wrong.
- Take out a good plant hire insurance policy – To ensure that claims are handled efficiently, and you receive the necessary cover, ensure that you go with a trustworthy insurance broker.
Why hire plant equipment instead of buying it?
It may seem obvious for a business owner to rather purchase equipment of their own instead of always having to hire equipment and deal with short-term plant hire insurance, but there are many reasons why hiring can be better than buying, including:
- Buying is expensive – Certain pieces of equipment can be outrageously expensive and a cost that many business owners simply cannot afford.
- Equipment is a responsibility – Owning plant equipment is a massive responsibility that some business owners simply do not want to deal with. Equipment needs to be regularly maintained, repaired when there are damages, and have a safe place for storage. This can be stressful and time-consuming.
- Equipment is only needed for a short amount of time – Perhaps the equipment being hired is only needed for seasonal work or for projects that only last a certain number of weeks or months. In these cases it does not make sense to buy.
Buying equipment will not eliminate the need for insurance. You will still need to take out insurance to cover damage, loss and theft of your equipment; it will just be a different kind of insurance.
What about if you own the plant hire equipment and are hiring it out?
So we have spoken in length about how important it is to have plant hire insurance if you are a business that is hiring equipment, but what responsibilities does the company that is hiring out equipment have?
In the UK, it is always the hirer’s responsibility to return the equipment in the same condition that it was given to them and to pay for any breakages and damages.
But what about cases in which the hirer does not have the money to replace lost items or repair broken machinery? This is definitely a worst-case scenario, but it is something that happens more often than you may think. When hirers get an expensive bill for repairs and damages, they often come up with excuses and try to look for loopholes in the contract.
It can be very annoying and time-consuming to try and get hirers who are unwilling to pay to actually settle their bills.
This is where plant owner’s insurance will come in. If you are the owner of plant equipment, you should have insurance that covers your fixed assets. This type of insurance should cover you if the hirer defaults on payment, which is unfortunately quite likely to happen at some point during your career.
You can minimise your own risks by ensuring the following:
- Only hire your equipment out to companies and individuals that are trustworthy and respectable. The last thing you want is to hire out your valuable equipment to a false company that makes off with it in the dead of night. It is up to you to do your research, ask for the right documents, and ensure that all your hirers are legitimate.
- Ensure that hirers all have the necessary insurance policies to cover them should something go wrong. You may want to have plant hire insurance policy details on hand so that hirers can get plant hire insurance then and there and in your presence.
- Your contracts have all the necessary terms and conditions, with emphasis on the fact that the hired plant equipment is the hirer’s responsibility during the lease period. If your contract is not clear and precise, your insurance policy may not pay you out should your hirer default. Not sure how to draw up a clear and simple contract? Seek the services of a contract lawyer.
The other option that you have available to you should the hirer default on payment is to pursue them in common law. But this route can be tedious and expensive. It is a far better option to protect yourself with the right plant hire insurance policies and detailed contracts.
Remember that any losses that are not paid by the hirer and that are not paid out by your insurance policy will have to be covered by you!
So it is safe to say that whether you are hiring plant equipment or hiring it out, it is very important to have the recommended insurance policies in place so that your business is properly protected, and that any loss or damage is not coming out of your pocket. Insurance policy payments can really add up, but it is important to ensure that they are properly covered should you experience loss or damage that you cannot cover yourself! We hope this article sheds some light on the importance of having the proper plant hire insurance in place.