Written by Candice Klau, Managing Director, Be Covered Insurance Brokers
Candice has more than 20 years of insurance broking experience and specialises in construction insurance for builders, developers and trade businesses across Australia.
For builders and contractors, tools, machinery and mobile plant are not optional extras. They are the core assets your business depends on every single day.
Whether you are operating excavators on a civil project, running power tools across a residential build, or moving mobile plant between job sites, the equipment your business relies on represents significant financial investment. When something goes wrong, the impact goes well beyond the cost of replacement.
A stolen generator, a damaged excavator, or tools lost in transit can bring a project to a standstill, delay completions, breach contract deadlines and cost your business far more than the value of the equipment itself.
Plant and Equipment Insurance helps protect the tools, machinery and mobile plant your construction business owns, hires, stores or transports between job sites. For builders and contractors, it is important to review this cover regularly so equipment values, storage locations, hired-in plant and transit risks are accurately reflected in the policy.
But like all insurance, the details matter. Many builders and contractors discover gaps in their cover only when they need to make a claim.
This article explains what Plant and Equipment Insurance covers, what it does not cover, and what to check to make sure your business assets are properly protected.
What is Plant and Equipment Insurance?
Plant and Equipment Insurance provides cover for the physical loss or damage of tools, machinery and mobile plant owned or used by your business.
For builders and contractors, this typically includes a wide range of assets across job sites, storage locations and in transit.
It is a separate cover from Contract Works Insurance, which covers the building works themselves, and from Public Liability Insurance, which covers injury or damage to third parties.
Plant and Equipment Insurance specifically protects the physical assets your business owns, hires or uses to carry out its work.
What does Plant and Equipment Insurance cover for builders and contractors?
While every policy is different, Plant and Equipment Insurance for builders and contractors typically covers the following areas.
Owned plant and equipment
This includes tools, machinery and mobile plant that your business owns outright, such as excavators, loaders, compactors, generators, compressors, power tools and hand tools.
Hired-in plant and equipment
Many builders and contractors hire plant from third parties. Hired-in plant cover can help protect you against loss or damage to equipment you are responsible for during the hire period.
Equipment on site
This can include plant and equipment located on an active construction site, including cover for insured events such as theft, accidental damage or fire.
Equipment in transit
Tools and machinery are often moved between job sites, yards and storage locations. Transit cover is an important inclusion that can sometimes be overlooked.
Equipment in storage
Plant and equipment may also need to be covered while stored off site, in sheds, workshops, yards or other storage locations when not actively in use on a project.
Equipment in vehicles
Builders and tradies often store tools and equipment in work vehicles, utes, vans and trailers overnight or between jobs. It is important to understand the policy conditions that apply to tools stored in vehicles, and whether your commercial vehicle insurance also needs to be reviewed.
Breakdown cover
Some policies include or offer optional mechanical or electrical breakdown cover for machinery and mobile plant. This can be particularly valuable for high-value equipment where downtime can create significant project delays.
What is not covered by Plant and Equipment Insurance?
Understanding the exclusions is just as important as understanding what is covered.
Common exclusions in Plant and Equipment Insurance policies may include the following.
Wear and tear
Gradual deterioration, rust, corrosion or mechanical wear is generally excluded. Plant and Equipment Insurance is designed for sudden and accidental loss or damage, not the natural ageing of equipment.
Unregistered or undisclosed items
Equipment that has not been listed on your policy schedule may not be covered. If you purchase new tools or machinery and do not update your policy, those items may be excluded at claim time.
Items below the excess
Every policy has an excess. If the value of a damaged or stolen item is less than your excess, a claim may not be worth making. This is particularly relevant for individual hand tools or lower-value items.
Intentional damage
Loss or damage caused deliberately, whether by the insured or their employees, is excluded under most policies.
Consequential loss
The indirect costs arising from equipment being out of action, such as project delays, contract penalties or lost income, are generally not covered under a Plant and Equipment policy.
This is why minimising downtime through prompt replacement or hiring is important when key equipment is out of action.
Unattended vehicles without forced entry
Tools or equipment stolen from an unattended vehicle may be excluded if there is no evidence of forced entry. Leaving equipment in unlocked vehicles overnight is a common cause of declined claims.
What assets should builders and contractors insure?
Plant and Equipment Insurance can cover a broad range of assets. Builders and contractors should review whether the following items are correctly listed and adequately insured.
Heavy plant and machinery
- Excavators and mini excavators
- Bobcats and skid steers
- Loaders and backhoes
- Compactors and rollers
- Concrete pumps
- Cranes and lifting equipment
- Forklifts and telehandlers
Site equipment
- Generators and compressors
- Scaffolding and formwork
- Concrete mixers
- Site sheds and site amenities
- Surveying and measuring equipment
- Safety equipment
Power tools and hand tools
- Drills, grinders and circular saws
- Nail guns and air tools
- Levels, lasers and measuring devices
- Specialist trade tools
Vehicles and trailers used to carry equipment
- Utes and vans carrying tools
- Trailers used to transport plant
- Equipment mounted on vehicles
If your business uses, owns or hires any of these assets, it is worth reviewing whether they are correctly listed and adequately insured.
Common gaps in Plant and Equipment Insurance cover
These are the situations where builders and contractors most often discover they are not properly covered.
New equipment not added to the policy
Purchasing new tools or machinery without updating your insurance schedule is one of the most common gaps. If the equipment is not listed, it may not be covered.
Underinsured values
Equipment values can change over time, particularly as replacement costs increase. If your insured values have not been reviewed recently, you may be underinsured at claim time.
No transit cover
Equipment lost or damaged while being transported between sites may not be covered if transit is excluded from your policy or if the item was not specifically listed.
Hired-in plant not covered
If you regularly hire plant from third parties, check whether your policy extends to cover hired-in equipment. The hire company’s insurance does not automatically protect your business from liability for loss or damage during the hire period.
Tools stolen from vehicles
Theft from unattended vehicles is a common claim scenario that can be declined if the vehicle was unlocked or there is no evidence of forced entry. Review your policy conditions carefully.
Equipment used across multiple sites or states
Some policies have geographic restrictions. If your business operates across multiple states or territories, check that your policy covers all locations where equipment is used or stored.
How much does Plant and Equipment Insurance cost in Australia?
The cost of Plant and Equipment Insurance depends on a number of factors, including:
- The total value of equipment being insured
- The type of plant and machinery involved
- How and where equipment is stored and used
- The claims history of the business
- The excess selected
- Whether hired-in plant cover is required
- Whether breakdown cover is included
Rather than focusing solely on premium, it is worth considering the true cost of being underinsured or uninsured.
A single equipment theft or a damaged excavator can represent tens or hundreds of thousands of dollars in replacement costs, lost productivity and project delays.
When should builders review their Plant and Equipment Insurance?
Plant and Equipment Insurance should not be a set-and-forget policy. Key triggers for a review include the following.
You have purchased new tools, machinery or plant
Any significant equipment purchase should trigger a review of your policy schedule to ensure the new item is correctly listed and insured for its replacement value.
Your equipment values have increased
Replacement costs for plant and machinery have increased significantly in recent years. If your insured values have not kept pace, you may face a shortfall at claim time.
You have started hiring in plant more regularly
If your business has increased its use of hired-in plant, check whether your policy covers this and whether the hire agreements you are signing place liability for loss or damage on your business.
You are working across new locations or states
Changes to where your business operates can affect geographic coverage under your policy. Check that all locations and states are covered.
Your storage arrangements have changed
If equipment is now being stored in different locations, such as a new yard, workshop or off-site storage facility, your insurer should be made aware.
At renewal
Policy renewal is the natural time to review your plant and equipment schedule, update insured values and confirm that all current assets are correctly listed.
Plant and Equipment Insurance checklist for builders and contractors
Before your next renewal or equipment purchase, review the following:
- All owned plant, machinery and tools are listed on the policy schedule
- Insured values reflect current replacement costs
- Hired-in plant cover is included if your business regularly hires equipment
- Transit cover is included for equipment moved between sites
- Storage locations are disclosed and covered
- Tools in vehicles are covered and policy conditions around unattended vehicles are understood
- Geographic coverage matches where your business operates
- New equipment purchases have been added to the policy
- Excess levels are appropriate for the value of assets being insured
- Breakdown cover has been considered for high-value machinery
Frequently Asked Questions
Does Contract Works Insurance cover tools and equipment on site?
Not automatically. Contract Works Insurance is designed to cover the building works under construction, not necessarily the tools, machinery or equipment used to complete the work. Plant and Equipment Insurance is a separate cover designed to protect business assets such as tools, mobile plant, machinery and hired-in equipment. Some Contract Works policies may include limited cover for tools on site, but this should be confirmed with your broker.
Are tools stolen from a ute covered by insurance?
This depends on the policy conditions. Many Plant and Equipment or tools insurance policies require evidence of forced entry for theft from a vehicle to be covered. Tools left in an unlocked vehicle, or stolen without signs of forced entry, may not be covered. Builders and tradies should check how their policy treats tools stored in utes, vans and trailers overnight.
Do builders need separate insurance for hired-in plant?
Yes, in many cases. If your business hires excavators, loaders, generators, scaffolding or other plant, you may be responsible for loss or damage during the hire period. The hire company’s insurance does not automatically protect your business from that liability. If you regularly hire equipment, hired-in plant cover should be specifically reviewed.
What does Plant and Equipment Insurance cover?
Plant and Equipment Insurance can cover physical loss or damage to tools, machinery, mobile plant and equipment owned or used by a business. Depending on the policy, this may include equipment on site, in storage, in transit, in vehicles, or hired from third parties. Cover varies between policies, so the insured items, locations and conditions should be checked carefully.
What is not covered by Plant and Equipment Insurance?
Common exclusions may include wear and tear, gradual deterioration, rust, corrosion, undisclosed equipment, intentional damage, consequential loss, and theft from unattended vehicles without evidence of forced entry. Exclusions vary between policies, so builders and contractors should review the policy wording before relying on the cover.
How often should builders review their Plant and Equipment Insurance?
Builders and contractors should review Plant and Equipment Insurance at renewal, after purchasing new tools or machinery, when equipment values change, when storage locations change, or when hiring in more plant. It should also be reviewed if the business starts working across new sites, regions or states.
Need help reviewing your Plant and Equipment Insurance?
At Be Covered Insurance Brokers, we work with builders, contractors and trade businesses across Australia to make sure their plant, tools and machinery are properly protected.
If you have purchased new equipment, changed how your business operates, or simply have not reviewed your policy in the past 12 months, now is a good time to check whether your cover still matches your assets and operations.
Speak with the team at Be Covered to review your Plant and Equipment Insurance and make sure your business assets are properly covered.
General information only: This article provides general information and does not take into account your specific business, equipment, projects, contracts or insurance needs. You should seek advice from a qualified insurance broker before making decisions about your insurance.
