Plant and Machinery Insurance
Plant and machinery insurance represents the insurance policy related to the equipment and machines used by a contractor company. It is a type of property insurance popular with both individuals and businesses that require bulldozers, cranes, forklifts, motor graders or any dangerous equipment vital for the company to function. This machinery can often weigh tonnes, and some can cost over £100,000, which is why breakdown or theft can be detrimental, especially to small businesses or entrepreneurs who cannot afford to purchase new equipment.
Once the equipment has been damaged or stolen, you must file a claim to the insurance company explaining in detail what occurred and of what value the equipment was. After this, the company will send their workers to examine or discuss the matter further, and if the policy checks out, the monetary compensation will be rewarded in due time. From here, the insurance company may pay for the disassembly of the equipment if it is broken and needs to be repaired. Or, if it is stolen, they will pay out money equal to the value of the equipment at the time the policy was taken out. Likewise, suppose the equipment cannot be bought or delivered right away. In that case, they can also pay for the cost of leasing equipment for a certain period, so business operations can go ahead as necessary.If you obtain plant and machinery insurance, the cost of repairing or replacing the equipment is covered by the insurance policy as long as you have been paying your monthly premium promptly and the cause of the destruction is covered in your policy. This includes all of your on-site industrial equipment like excavators, rollers, bulldozers, cranes, forklifts, dumpers and others.
What Does Plant and Machinery Insurance Not Cover?
Plant and machinery insurance cover theft and physical damage, but there are also many restrictions as to whether the insurance company will pay out or not. These are all subject to the plan you pay for and the features offered by the individual insurance company, but some exclusions generally apply to all policies.
Before the policy’s start date, any machine faults do not count, and the claim will not be approved. For instance, if a bulldozer was stolen or a pipe was broken before being accepted by the insurance company, they are not obligated to reimburse you for the costs. Similarly, if the claim is not filed within the set time period, even if it is after the policy’s start date, the time limit would have surpassed, and it would be too late to claim any financial compensation.
Can Extras Be Added to the Policy?
Whilst this type of insurance is beneficial, as aforementioned, it does not cover everything. There is the option to add some supplementary extensions to the policy, although it should be noted that these will increase the monthly premium price. Most commonly, businesses remove machinery from their insurance policy. Hiring a specialist company can often be costly to take the faulty appliance and transfer it to a disposal site. This can also include the transportation of the equipment in question to the site of repairment and back, which can be very expensive due to the weight of the machinery.
Third-party liability can save the equipment owner from financial loss. If a third party like the customers claimed they were injured or harmed by the machinery, they could file a claim against the first party, the owner of the machine. Even if the first party is held legally liable, the insurance company would be obligated to pay the costs to the client, and the owners would thus not suffer financial loss.
Also, any damage caused by negligence or intentional destruction is not covered, as is any breakdowns caused by misusing the equipment, maintaining it improperly or not using it at all. This is because the destruction is caused through a fault of your own and could have been avoided.
Lastly, suppose your business operates in an area prone to natural disasters. In that case, it can be beneficial to add a clause in the policy protecting against damage caused by fires, floods, earthquakes or tsunamis. Due to the unexpected nature of such events, it is challenging to plan and impossible to prevent these occurrences, and having insurance to protect against them is the only way to ensure your contents are safeguarded.
What Factors Will Affect the Price?
As with any insurance policy, several reasons influence how much your premium will cost.
Most importantly, the type of equipment you use and their value is the most significant factor in how much you have to pay monthly. Equipment that is more expensive, more extensive or dangerous is usually labelled as ‘higher risk’ because there is a fault. The insurance company have to pay more than the average to get them repaired or replaced. Moreover, if the equipment is rare or the model is exclusive, this will contribute to the cost of restoration, whereas cheaper and more common equipment would make the premium cheaper. More costly machinery is also more likely to be stolen. To decrease the premium costs, the equipment should be well preserved and used only by employees that have been fully trained on how to use them, ensuring that the machines are correctly used and thus decreasing the risk of damage.
In conclusion, plant and machinery insurance is vital for companies that use equipment, heavy machinery, and construction apparatus. Types of professions these concerns are contractor companies that hire builders, electricians, and material handlers, which are affected by the risk of their machines breaking down, leading them to be unable to complete their work. Obtaining this insurance prevents the financial loss of having to replace or repair your equipment, which is particularly beneficial for businesses that generate lower revenues and would be devastated by significant losses.
Find out more about Plant and Machinery Insurance here.
Other useful links about business insurance:
Business Contents Insurance
Business Building Insurance
Employers’ Liability Insurance
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