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Why it Makes Sense to Insure Heavy Equipment


Heavy equipment such as cranes, loaders, backhoes and excavators routinely perform arduous tasks and are exposed to significant risks and dangers, during operation and transportation, which increase the chances of accidents and damage. Contractors need to be properly insured, as the costs of replacement of frequently used machinery, can easily delay projects and affect a firm’s finances. What is important, is for the contractor to do their due diligence on the insurance being offered, to ensure they fully understand what sort of cover they are getting.

Insurance options

The best option is generally to use an insurer who will offer coverage on a replacement cost basis. This provides the contractor with full replacement coverage, regardless of the damaged vehicles age and depreciation values, and is based on the amount of money involved from the coverage selected, not on the actual cost. Ideally the insurance will cover the replacement costs for damaged, stolen or destroyed machinery with little or no excess cost, and will normally cover both operating risks and third party liability. Operating risks will cover any eventuality that occurs while the equipment is in operation or being transported. Another critical area of coverage is equipment breakdown insurance, which will often cover areas other policies do not cover, such as malfunctions, fire damage, storms or explosions.

Additional coverage

Aside from the cost of actually getting your equipment repaired or replaced, additional coverage is recommended to deal with indirect costs as a result of damage and operational interruptions. If a contractor is forced to stop work because of a breakdown or accident, the associated loss of income or sudden and often ongoing expenses, can be significantly larger than the costs associated with those of fixing the equipment itself. While a company will often own their own equipment, having a rental reimbursement policy will cover the cost of bringing in urgently needed rental equipment, so work can continue while the damaged machine is being repaired.

Insurance for loaned equipment

Heavy machinery insurance should also be in place for rented or leased machinery. The contractor should confirm with their insurance company that they have a policy covering the machinery while it is being loaned. The lessor should not be responsible for the costs of repairing damaged rental equipment.The lessor should also hold Contingency and Excess liability in addition to Asset insurance, to cover all eventualities and ensure they are adequately protected from whatever third party claims the operators actions may have caused.

Bottom line coverage

Regardless of if they own or are renting their equipment, contractors should always seek professional help, to ensure they can properly discuss the different types of applicable and available coverage. A contractor has to ensure that all policy options are investigated to make sure their legal responsibility for all eventualities is covered. Selecting the right cover is far from being simple, yet doing so ensures that breakdowns, thefts, or accidents to not impact the contractor’s bottom line.

Affordable plant coverage can be found in your local area, though be sure to look for a professional insurance company that offers an extensive range of equipment coverage and provides policies to look after all of your needs and responsibilities adequately.




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