Why hire terms matter as much as the policy
Insurance responds to loss that the policy covers. The hire agreement decides what you owe the hire company if a machine is damaged or stolen. These are not the same question. You can be insured and still be in breach of the hire agreement, or you can owe money under the agreement for something your policy excludes.
This is why the sensible order is to read the hire agreement first, and then arrange the insurance to meet it. Our hired-in plant insurance page explains the cover itself.
Clauses to read in a hire agreement
| Clause | What it may mean |
|---|---|
| Risk of loss or damage | The hirer may be responsible from delivery to collection, whatever the cause, including theft and the acts of third parties. |
| Insurance obligation | The hirer may be required to insure at full replacement value, note the owner’s interest and provide evidence before delivery. |
| Damage waiver | The hire company may offer to limit your liability for a fee, subject to exclusions such as tyres, negligence or misuse. |
| Loss of use or hire charges | You may be charged for the period a damaged machine is out of service, in addition to repair cost. |
| Operator | In a wet hire the hire company supplies the operator. In a dry hire you may be responsible for who operates the machine and their competence. |
| Security and storage | The hirer may be obliged to keep the machine in a secure place, with keys controlled and tracking left active. |
| Condition on return | You may be liable for damage beyond fair wear and tear and for cleaning or refuelling. |
| Indemnities | The hirer may indemnify the hire company against third-party claims arising from the machine’s use. |
These are examples of what clauses may say. Your agreement may differ.
Wet hire and dry hire
- Dry hire
- You hire the machine without an operator and normally supply and control the operator. The hire agreement usually places the risk of loss and damage on you.
- Wet hire
- The hire company supplies a machine and operator. Responsibility for the machine, the operator’s acts and third-party claims can differ, and the agreement should say how.
Whichever structure applies, make sure the operator’s competence, supervision and authority on site are clear, because these often decide who is responsible.
Ways to meet the insurance obligation
- The hire company’s damage waiver. It may satisfy the agreement but is not insurance for you, and its exclusions need to be read.
- Your own plant policy. It may extend to hired-in plant if the wording and the schedule allow it.
- A separate hired-in plant arrangement. Written for equipment you hire, usually based on hire values.
- A combination. For example, a waiver for short hires and a policy for long ones.
Checklist before you sign
Hire agreement review
- Who bears the risk of loss or damage, and when does it start and end?
- What value must I insure the machine for?
- By when must I provide evidence of insurance, and in what form?
- What does the damage waiver cost, and what does it exclude?
- Will I be charged while the machine is repaired?
- What operator and security conditions apply?
- How will third-party claims be handled between the hire company and me?
If you are the hire company
The same agreement matters from the other side. Plant hire businesses should check that their terms are clear, that their own insurance recognises machines on hire and that hirers are required to take appropriate steps. See plant hire businesses.
Common questions
What if the hire company says its damage waiver is all I need?
A waiver may satisfy the agreement, but read what it excludes. Commonly excluded items include tyres, negligence, misuse and theft where security conditions are not met.
Who is liable if a wet-hired operator damages someone else’s property?
That depends on the agreement and the facts. Operator control, instructions on site and the indemnities in the contract all matter. Have the clause reviewed before signing.
Do I need to give the hire company a certificate of insurance?
Many agreements require evidence of insurance before delivery. Ask for the requirement in writing and allow time for the insurer to confirm cover.
Hiring plant for a project?
Send us the hire agreement or the key terms and we will help you decide how to meet the insurance obligation.
Get a QuoteAn enquiry does not put cover in place. Cover is subject to underwriting and policy terms.
Related reading
- Hired-in plantCover aimed at your responsibility for hired equipment under the hire agreement, including damage and loss while in your care.
- Plant All RiskCover for excavators, loaders, rollers and other contractors’ plant against accidental loss or damage, subject to terms.
- What affects the cost of plant insuranceWhat affects plant insurance cost for contractors: valuation, equipment type and age, usage, location, security, operators, excess and claims record. No premium rates.
- Plant hire businessesOwnership, hire terms, damage waivers and machinery use for businesses that hire out plant.