Arranging Contractors Plant and Equipment Insurance is a must. Let’s look at why so many regard it as an extremely important and valuable cover.

What is Contractors Plant and Equipment Insurance?

Contractors plant and equipment (CPE) insurance covers the loss or damage to construction machinery. Fortunately, this is available for both owned and hired-in plant.

Due to the environment and use of the construction equipment, they are exposed to risks including damage on site or in transit, fire and even theft.

Owned Plant 

Owned Plant Insurance financially protects companies from the risk of damage or loss to plant that they own. 

Hired-In Plant

Hired-In Plant Insurance financially protects companies from the risk of damage or loss to plant that they have hired.

538 Underwriting’s Contractors Plant and Equipment Insurance policy has been designed to cover owned &/or hired-in plant. The policy meets and addresses many of the Insurance requirements and risks that our clients may face when operating Constructional Plant and Equipment.

Contact Senior Underwriter Paul Barnett on paul.barnett@538underwriting.co.uk for any enquiries regarding CPE Insurance. Alternatively, reach out to our dedicated team of underwriters whose contact details can be found within our resources section.

Why do you need Contractors Plant and Equipment Insurance?

CPE is a big investment for contractors. They rely heavily on it whilst working on the projects they are undertaking. They face risks at the contract sites (as well as in transit) including theft & malicious acts, accidental damage, fire, human error & natural events which stop it working. As soon as this happens, it can cause a huge disruption to the planned activities, not to mention the time line. The effects which flow as a direct result can hit certain contractors more, especially small and medium sized businesses who may be less financially stable.

Whether you like it or not, unfortunately so much of CPE attracts the focus from other unwanted parties. This is irrespective of whether your CPE is owned, leased or hired-in as it is very theft attractive. What’s more is there are ‘professional criminals’ targeting it, who don’t tell you when they are going to strike! This alone should be a good reason to think about arranging insurance coverage for CPE with broad coverages available.

Before delving in further, let’s make one thing crystal clear for hired-in CPE. The hiring conditions will make you contractually responsible to indemnify the Plant Owner for loss or damage including continuing hire charges, so without arranging suitable CPE cover you are unnecessarily exposing your bottom line.

Contractors Plant and Equipment – Theft Incident

Imagine this (don’t let it be you):

‘I have got our guys on this contract, it’s a job we priced quite competitively on and as planned we hired in some specialist plant and machinery which we didn’t have – well we hadn’t been there for more than a couple of days and left for the weekend.

The rest is history really. We turned up on Monday only to find that one of the  key items along with some of our own plant had been stolen and now in contact with the police who state ‘that’s long gone and possibly all out of the country’. They were true professionals!

The worst thing is that to just tick up our profit margin a little, we thought we would skip the insurance bit as we have always been safe before.

I will now have to explain to the MD, company secretary, finance manager etc what’s gone wrong, and I am not looking forward to it!

I realise now the comparison was peanuts. We could have arranged cover and only have been responsible for the deductibles. Now we are on the line for cost of the item from the hirer plus continuing hire charges to them even though we can’t use it ourselves. Well, we can’t turn the clock back but if I am still here I will always ensure we have adequate insurance coverage in place!’

So, it is not difficult to appreciate why many parties in the construction industry immediately recognise the importance of arranging cover and don’t want to leave it to chance. Put another way, your profit margin may be be totally eroded at your contract site with little work accomplished. The Principal you are working for will rather expect you as a competent contractor to have such cover for all CPE in place, whether its a contractual requirement between you and them or not.

Why you shouldn’t take the risk

Whilst most things that can go wrong at contract sites are reasonably known and there are even steps put in place to try and prevent many of them, the circumstances and timings are not, and quite frankly, there is never a good time for any one or more of them to occur.

Fundamentally, contractors want to keep their CPE fleet working. When unplanned events occur, results may be costly for repairs or replacements of CPE might now be needed. It may be a real specialist piece of kit which is then harder to source and takes even more time.

Why put yourselves at so much risk – there is so much to lose. Those that have adequate insurance in force are the prudent ones. Just one event can cause a bigger such an unwanted financial burden, plus possible damage to your reputation as well. There are many insurers who can provide the coverages desired for the insurances of CPE for both owned and hired-in in the market place. 

CPE insurance should be regarded as a promise to make a fast settlement for covered events, subject to policy terms and conditions, in exchange for a reasonable premium. It should ‘guarantee’ the unknown to a certain extent, which without insurance is impossible. The contractor would be responsible for any deductible, but really that is minimal compared to the possible financial disruptions mentioned above.

CPE insurance is vital for contractors operating in the construction industry. CPE insurance enables contractors to safeguard their investments, mitigate operational risks whilst maintaining business continuity at the times it matters mosts. This is when it is challenged the most through the actions of your workforce or others. 

So this is your reminder to buy insurance for your CPE. Take those best steps that when the worst happens, you have a better chance of staying on schedule, or keeping delays to a minimum and having less difficult conversations with your client and your management. 

Consider 538 Underwriting for your Contractors Plant and Equipment Insurance. We have a team of experienced underwriters ready to assist you.

Contact our Senior Underwriter, Paul Barnett, on paul.barnett@538underwriting.co.uk for more information. Alternatively, reach out to our dedicated team of underwriters whose contact details can be found within our resources section.

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