As a construction contractor, your plant and equipment are the lifeblood of your business.
But how can you best manage the risks whether your gear is on your premises, on a work site, or in transit? And it might be your own plant or on lease. When it’s damaged, breaks down, or is stolen, it could well put the brakes on your business operations.
Poor risk management has negative flow-on effects. It’s one of the reasons only 11% of construction industry operators surveyed by professional services firm KPMG were able to deliver their projects on time and under budget. Much of their success hinged upon proactive rather than reactive project risk management.
What is contractors’ plant insurance?
Contractors’ plant or equipment insurance is a powerful element of your risk management strategy. It usually covers:
Material damage for static and mobile plant equipment such as cranes, forklifts, grader, bobcat, asphalt sprayer, cherry picker, chipper, pile driver, dewatering pump, excavators, concreting equipment, trucks, trailers, and farming machinery
Road-risk liability (as long as it’s registered and the plant is part of an optional extension cover)
Within the crane hire, concreting, mining, excavating/earthmoving, and related industries, a broad form of public and product liability for businesses
Theft
Business interruption.
You may not know standard cover should include:
Unintentional overloading
Ongoing hiring costs
Damage to goods lifted
Contractual liability
Supports that vibrate, weaken or need to be removed
Plant appreciation value, and more.
Tailoring cover to your needs
You can insure a single piece of equipment or a whole fleet. There are several options to extend your policy, including agreed plant value, claim preparing costs, hiring plant, hired not owned trailers, underground risks, finance gap, and breakdown of electrical and mechanical parts.
Keep in mind, insurers may have an automatic limit for:
Removing debris
Removing and recovering plant, whether damaged or not
Dangerous goods carriage
Tools and accessories
The excess for free windscreen replacement
Costs to get repairs done swiftly so you can be back in business sooner (expediting expenses).
So here’s an idea of why businesses are most likely to claim on their contractors’ plant insurance.
Common plant claims
Theft is a common claim, with an estimated $650 million of high-cost construction machinery stolen from Australian worksites each year. The Construction and Mining Equipment Industry Group says Australian construction sites also lose $140 million of plant equipment annually, too. Fitting a tracker or installing an immobiliser on your plant will help cut your theft risks.
As well, here are other reasons why contractors claim on this insurance (which also serve as useful tips on what your business can do to avoid these issues):
Unlicensed operators – without proper training or skill to handle mobile plant – causing damage and possibly injury or death
Equipment damage due to not adequately managing dust, noise, or vibration during plant operation. Dampening down dust and working during permitted hours, and not exceeding acceptable noise levels can help address these risks. Check out this free plant assessor app
Not following workplace health and safety laws resulting in fines, injury, death, and possibly imprisonment
Failing to check for overhead powerlines before starting work and rerouting work accordingly
Overloading cranes before lifting or using them in windy conditions, where the ground is too steep, or the outrigger support is inadequate
Forgetting to check the ‘Dial before you Dig’ referral service to find out where underground utilities are on your worksite (have you re-registered, by the way?)
Damage due to debris, soil, and grease build up on the plant/equipment engine, electrical or exhaust systems
Not working within the manufacturer’s guidelines for your plant or equipment.
So, there’s a lot your contracting business can do to manage your risks when it comes to plant and equipment. It’s just as important to talk to us to customise insurance as part of your smarter risk management.
