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Plant Insurance

Plant Insurance

If you own or hire plant to assist in sorting or grading waste, it’s a good idea to ensure your plant is insured for losses such as theft, fire and accidental damage. In addition, it is possible to arrange inspection cover to ensure your plant and machinery is regularly inspected ensuring that you are complying with legislation.

How to go about Insuring Plant and Machinery

There are a couple of options on how to insure your equipment – either on a specified or an unspecified basis. Whichever way you insure the plant, the insurers will require two sums insured from you – 1) The New Replacement Value (NRV) of your plant and 2) the Current Market Value (CMV). The reason insurers ask this is that some policies pay on a “new for old basis” on plant up to 1 or 2 years old, so they will need to know the maximum amount that they may need to pay for a loss on the newer items of plant.

There are also different types of policy available for which plant can be included under – for instance Commercial Combined Insurance can be arranged which extends to include Public and Employers Liability, Business Interruption and Property Damage or a standalone plant policy can be arranged.

Care needs to be taken when arranging plant insurance as there is a significant difference between plant that you own or plant that you hire in. So, you need to be clear when identifying each item of plant, which items are on lease, short or long term hire against those that are owned by you. In addition, it is also possible to insure against claims made against you for loss of hire charges. You may find under your terms of hire for plant that is not owned by you, that you are liable for the ongoing loss of hire charges as a result of a loss. i.e. the owners of the plant lose hire charges up until the point that the insurers agree a market value and settle a claim to the owner of the plant.

If you have static plant and machinery, trommells, picking lines, feeders, screeners and the like, insurers are now looking very closely at a business’s fire prevention measures. Insurers like to make sure that there is a written procedure which is adhered to in respect of clearing the machinery so that waste debris is not left in or around the machinery when it is not in operation which could lead to a fire claim for instance.

Items of plant such as shredders are now very difficult and expensive to insure. These items are very expensive – some in excess of £250,000, most insurers now require that these machines have automated fire extinguishers fitted otherwise no cover is offered.

Woodchippers and Woodshredders have always been difficult and expensive to insure, again due to the risk of fire – these things run hot and surprisingly they ignite more than any other waste recycling machinery. It’s a case of good housekeeping = limited chance of fire and if you are able to prove to insurers that every possible precaution is taken in respect of fire you are more likely to be able to arrange suitable cover as the most sensible premium.

Plant Inspection

Every business operating plant and machinery has legislation imposed on it in respect of maintenance and upkeep. Separate insurance cover can be arranged, whereby the insurers appoint engineers to inspect plant and machinery advising you of any maintenance issues arising from the inspection.

Claims Settlements

Insurers normally settle claims based on the Current Market Value. After a loss has occurred, the insurers will normally appoint a loss adjustor to arrive at a press loss value for the item(s) of plant lost/damaged making an offer based on the amount needed to replace the item. Insurers never replace the item themselves, they make a payment to cover the financial loss – this is called a policy of indemnity.

Breaking News ....

A major cover holder – Paladin Underwriting has given 7 days notice of policy cancellation to policyholders in the recycling industry. GM Insurance Brokers do not know why they have cancelled policies midterm (as we do not hold any policies via this facility), it could be for any number of reasons that the policies are being cancelled mid-term. For whatever reason, this is shocking news to policyholders who essentially have 7 days to arrange alternative cover – or face trading without insurance cover!

Renewal Info

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