JCB Insurance MD Michael Gregory says:“As the construction market emerges from recession, contractors putting out tenders for the supply of plant are in a very strong negotiating position and many not only want the best prices but also require hire companies to take on some of the risk. On larger tender-based plant supply contracts, it seems to be increasingly common for plant insurance to remain with the owner of the equipment, not the contractor as is usual under CPA terms and conditions.”
This leaves hire companies wanting to win new business either having to insure the plant on their own policy and see their premiums rise as a result, or send machines out without insurance and take the hit if any are stolen or damaged. According to Mr Gregory a small number of hire companies are actively using ‘hire without the need to insure’ as a differentiator to win contracts.
Longer term hire
JCB HireMax is aimed at plant hire companies involved with longer term hire that are unable to carry those additional risks. It is a stand-alone policy taken out as and when required and covers the plant hire company against the loss or damage to machines while on a customer’s site.
Mr Gregory explains: “If a claim does arise it has no effect on the level of premiums the hire company would pay on its main insurance policy. This means hire companies don’t have to take the risk of waiving the requirement to insure plant or waste time trying to get reluctant insurance companies to provide ‘Indemnity to Hirer’ cover.”
The premium for HireMax is a fixed percentage of the hire rate and discounts of up to 50 per cent are available for plant fitted with security devices and for hire companies willing to carry a larger excess. “Knowing the premium up front enables the hire company to put in tender prices knowing that their risks plant risks are covered if they win the business,” says Mr Gregory.
Plant hirers can get cover regardless of which company they use for their main insurance or which brand of machinery they own - although they are expected to undertake diligent ID and reference checks on customers seeing to hire equipment.