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Hiring of plant equipment

Finances and budgets are always a key factor when it comes to whether companies should purchase or hire construction equipment, especially if the equipment will only be used for one project while collecting dust and depreciating thereafter.


In the instance of needing the machinery for a brief period of time, the benefit of hiring instead of purchasing is that once the project is completed you can return it and not have to worry about risks and expenses that come with long-term ownership, such as theft, storage and maintenance costs.


What are the risks involved with hiring equipment?


Before you can even use the machinery, it is required that there be a hire agreement between the hirer and the owner, keeping in mind that the construction equipment will be in your possession – as the hirer – for the course of the agreement.


The majority of plant hire companies subscribe to the Contractors Plant Hire Association (CPHA) hiring agreement. The majority of insurers will in fact only offer insurance if the CPHA agreement is used or as long as the conditions of the contract are more onerous than the CPHA conditions.


As a result, the risk of liability also falls on you, and no longer on the owner of the equipment/machine even though they are the service provider. However, as the client, you have the choice to insure the liability with the service provider’s current insurer or you will be required to provide your own hire-in cover.


The contract usually states the following:


  • The risk of any loss of or damage to the plant howsoever caused, including theft or any attempt thereat, and the risk of any loss of or damage to property or persons passes to the hirer on commencement of the period of hire.
  • Such risk remains with the hirer until the plant is delivered to the owner at the end of the period of hire.
  • The risk remains with the hirer irrespective of any insurance policy covering either the plant or the hirer’s liability for damage to the plant.

Insurance of all and any liability of whatsoever nature on the part of the hirer arising out of the use of the plant or the hire of the plant is the responsibility of the hirer.


We have developed products that ensure you as the hirer have adequate cover options for construction equipment for the duration of your contract. Cover options include:


  • Option 1: Annual policy to cover all items hired for the year as and when needed.
  • Option 2: Once-off cover for the hired item for the agreed duration.

It is important to evaluate all the risks that come with the hiring of construction equipment. One event or mishap can seriously affect the profitability of a project due to an insurance claim that is either only partially covered or not covered at all.


For a free insurance risk assessment of your business profile, contact us directly.