Plant hire insurance: what cover do you need to hire machines in or out?

Key points

• Without hired-in plant liability, damage to a machine you hire in is usually a bill you pay yourself, fault or not.
• A damage waiver from the hire company cuts your share of the bill. It is not insurance.
• Send your machine out on dry hire and the paperwork generally decides whether theft or damage by the hirer is covered.
• The income a machine loses while it is in the workshop is not the repair bill. Only some plant policies cover it.

Am I liable if I damage a machine I hire in?

In most cases, yes. Read the hire agreement before you read the insurance policy.

Most agreements make you, the hirer, responsible for the machine's full replacement cost if it is damaged, lost or stolen while it is in your care, custody or control, whether or not it was your fault. Not just an excess. The whole machine.

Hired-in plant liability protects you against your liability under the hire agreement. Without it, you are personally or commercially exposed to the full cost of someone else's machine.

Is the hire company's damage waiver enough?

Usually not. Some hire companies sell a damage waiver, a fee added to the hire cost that reduces how much of that liability sits with you. But a waiver is a term of the hire contract, not an insurance policy, and it rarely covers everything a proper hired-in plant liability policy would.

What is the difference between dry hire and wet hire?

Dry hire means the machine is hired without an operator. Whoever hires it runs it with their own staff. Wet hire means the owner's own operator goes with the machine.

The difference matters for cover, not just liability. Wet hire is largely automatic under most plant policies. Dry hire is where the real conditions sit, on both sides of the transaction: hiring a machine in without an operator, or sending your own machine out that way.

What cover do I need to hire my plant out?

Hired-out plant liability. If you hire equipment out to other businesses, you need it, and the level of risk depends on how the machine goes out.

Dry hire generally carries a higher liability exposure for you, because you have less control over how the machine is used.

Wet hire keeps more of the operating risk and responsibility with you, but is comparatively straightforward to keep covered.

What does a dry hire agreement need to keep my machine covered?

Paperwork, done before the machine leaves. When your machine goes out on dry hire, keeping cover for theft or damage caused by the hirer generally depends on four things:

• A signed hire agreement.
• No damage waiver in that agreement that undercuts your insurer's ability to recover from the hirer.
• The hirer's identity and licence recorded at handover.
• A genuinely secure handover.

Read the paperwork before you sign it, not after something goes missing.

Does my policy pay the hire income I lose while a machine is off the road?

Some plant policies do, as a benefit separate from the repair cost. The repair cost and the income you lose while the machine is being repaired are two different exposures, so know which one, if any, your policy covers.

It generally works one of two ways:

• A flat weekly amount. You choose it up front, and it pays for every week the machine is off the road after an accepted claim, regardless of what the machine would actually have earned.
• What the machine earned. The loss is calculated from what the machine actually earned over the twelve months before the damage. That is a more accurate figure for a machine with a real trading history, but it needs that history to exist.

One catch. On the weekly-benefit wording we place, damage while a machine is out on dry hire, without your operator, is excluded. Check that before you rely on it.

If hiring your machines out is part of how your business earns money, ask whether loss of hire is included or needs adding. How a plant policy settles the machine itself, and the security conditions some insurers attach to theft, are on our plant and equipment insurance page.

Frequently asked questions