INSURANCE GUIDE Hired-In Plant Insurance - what it covers and what it costs |
TL;DR
- Hired-in plant insurance covers damage or theft of plant equipment hired from a third party - not equipment the business owns outright.
- Most plant hire contracts make the hirer responsible for the full replacement cost if the machine is damaged or stolen during the hire period.
- Annual blanket policies typically cost between 1% and 3% of the replacement value of plant on hire at any one time.
- A Damage Waiver from the hire company is not insurance - it caps but does not eliminate liability and rarely covers theft.
- Key exclusions: mechanical breakdown, wear and tear, tyre damage, losses caused by overloading, and loss of use.
Last reviewed: June 2026
KEY FACTS | |
| What it covers | Accidental damage, fire, theft, flood, and vandalism affecting plant hired from a third party during the hire period |
| Who needs it | Contractors, groundworkers, builders, landscapers, any business hiring excavators, telehandlers, scaffolding, or access equipment |
| Typical annual cost | 1% to 3% of the agreed replacement value of equipment on hire at any one time |
| Legal requirement | Not required by statute but required by most plant hire company standard terms and conditions |
| Key exclusion | Mechanical or electrical breakdown, wear and tear, tyre punctures, operation beyond rated capacity |
| Regulator | Financial Conduct Authority (FCA) for insurers providing the product |
What Is Hired-In Plant Insurance?
Hired-in plant insurance provides protection for plant and machinery that a contractor or business has hired from a hire company rather than purchased outright. The cover applies during the contractual hire period and ceases when the equipment is returned to the hire company at the end of the hire.
The reason this cover matters is that standard plant hire agreements under the Construction Plant-hire Association (CPA) conditions make the hirer financially responsible for the full replacement cost of equipment that is damaged, destroyed, or stolen while on hire. Without specific insurance, a contractor could face a claim of tens of thousands of pounds for a single damaged machine. A mid-range 8-tonne excavator can carry a replacement value of GBP 80,000 to GBP 120,000, and larger plant considerably more. Telehandlers, large piling rigs, and tower cranes can have replacement values of GBP 200,000 to GBP 500,000 or above.
Hired-in plant insurance is a separate product from own-plant insurance, which covers machinery the business has purchased. Many contractor package policies include both sections, but it is important to check the policy schedule to confirm which applies, what the per-item limit is, and what the maximum value on hire at any one time is set at.
KEY FACTS
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What Does Hired-In Plant Insurance Cover?
A standard hired-in plant policy provides cover for the following during the hire period:
- Accidental damage including collisions, overturning, and impact damage caused by site operations
- Fire, explosion, and lightning damage to the hired machine
- Theft of the plant from the hire site, subject to site security conditions in the policy being met
- Flood and storm damage caused by weather events
- Malicious damage and vandalism by third parties
Cover is typically on a replacement-value basis rather than depreciated market value, meaning the policy pays what it costs to replace the hired machine with a comparable new or equivalent model. This is significant because the hire company will claim replacement cost under the hire agreement.
Some policies also cover additional costs arising from loss, such as hire company recovery and transport costs for the damaged machine. These extensions vary between policies and should be confirmed in the policy schedule.
What Is Not Covered?
Understanding exclusions is as important as understanding cover. Common exclusions in standard hired-in plant policies include:
- Mechanical or electrical breakdown - faults developing through normal use are excluded and are the hire company responsibility under most hire agreements
- Wear and tear - gradual deterioration is not an insurable risk
- Tyre damage - punctures, cuts, and tyre failure are commonly excluded. Some policies provide limited tyre cover as an extension
- Damage caused by overloading - operating plant beyond its rated safe working load or capacity voids cover and is a health and safety breach under the Provision and Use of Work Equipment Regulations 1998
- Loss of use - the hire company loss of rental income while damaged plant is repaired is not covered under most standard policies
- Consequential loss - project delays or financial losses from plant unavailability are not covered
Damage Waiver vs Hired-In Plant Insurance
Many plant hire companies offer a Damage Waiver (CDW - Construction Damage Waiver) as an add-on to the hire agreement. A damage waiver is not insurance. It is a contractual arrangement with the hire company that limits the hirer liability to a capped amount in the event of accidental damage. Key differences:
- A damage waiver is offered and administered by the hire company and is not a regulated financial product. It is not covered by the Financial Services Compensation Scheme (FSCS).
- A damage waiver typically caps but does not eliminate financial exposure. The hirer may still pay an excess or be liable for losses above the cap.
- A damage waiver almost never covers theft. A hired-in plant insurance policy typically does, subject to security conditions being met.
- A damage waiver covers only the hire company claim. It does not cover third-party property damage or injury claims from the same incident, which require separate public liability insurance.
Both the CPA and HAE advise hirers to take out specific hired plant insurance rather than relying solely on a damage waiver, particularly for high-value plant and longer hire periods.
Annual Blanket Policy vs Per-Hire Cover
Contractors who hire plant regularly are better served by an annual blanket hired-in plant policy covering all hires during the policy year up to a maximum agreed value simultaneously. The advantages are administrative simplicity, potential cost savings for regular hirers, and continuous cover without the risk of a gap if a separate arrangement is not made before each hire.
The maximum value on hire at any one time must be set realistically. If the figure is set too low and the actual value of plant on hire exceeds it at the time of a loss, the insurer may apply average (proportionate settlement) to the claim. For a contractor who regularly has three or four machines on hire at once, the blanket limit needs to reflect that combined exposure.
Ad-hoc or infrequent hirers may find per-hire cover more appropriate, arranged through specialist brokers before each hire commences. Day rates from specialist brokers start from approximately GBP 15 to GBP 50 per day for typical construction plant depending on type and value.
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Disclaimer: This guide is for general information only. Kael Tripton Ltd is not authorised or regulated by the FCA. Always verify details with an FCA-authorised insurer or broker before purchasing. |
Frequently Asked Questions
Do I need hired-in plant insurance if the hire company offers a damage waiver?
A damage waiver and hired-in plant insurance are fundamentally different products. A damage waiver caps your liability to the hire company in some scenarios but does not cover theft and is not an FCA-regulated product. A standalone hired-in plant insurance policy from an FCA-authorised insurer provides broader, independently regulated protection and covers theft subject to security conditions. For high-value or long-duration hire, specific insurance is generally advisable.
Does public liability insurance cover hired plant?
Public liability covers third-party claims for injury or property damage caused by your business activities. It does not cover damage to or theft of the hired plant itself. If a hired excavator is damaged in a site incident, the PL policy covers any third-party property damage from that incident; the hired plant policy covers the cost of repairing or replacing the machine.
What site security conditions must I meet for a theft claim?
Most hired-in plant policies require that plant left unattended overnight must be immobilised (keys removed, isolation switches engaged), the cab locked, and the site secured with appropriate fencing or hoarding. Some policies also require the use of a Datatag or equivalent plant marking and tracking system. Failure to comply with security conditions set out in the policy can invalidate a theft claim entirely.
Can I get single-day hired plant cover?
Yes. Specialist brokers offer short-term hired-in plant policies for individual hire periods including single-day arrangements. These are typically arranged by telephone or online and confirmed by a certificate of insurance. Day rates are higher per day than annual blanket policies but are appropriate for infrequent hirers.
What happens if the hired plant breaks down due to a fault?
Mechanical or electrical breakdown through normal use is excluded from hired-in plant insurance. Under CPA conditions of hire, the hire company is responsible for providing equipment in good working order and for repair or replacement if a mechanical fault develops. Notify the hire company immediately in writing if the machine develops a fault during hire.
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