Plant & machinery insurance

A steady guide to protecting your kit

Plant and machinery insurance helps cover the cost of damage, theft, breakdown, or third-party liability linked to owned or hired-in equipment. For UK construction, manufacturing, and plant hire businesses, it is a practical way to control financial shocks when something goes wrong on site or in transit. In 2025 the market has generally softened for well-managed fleets, which means more competitive premiums and improved conditions for policyholders who can demonstrate good risk controls. At the same time, underinsurance is widespread, with many businesses relying on outdated valuations despite higher replacement costs. Getting sums insured right is as important as buying the policy itself.

This guide explains how cover works, what it typically includes, and where the limits sit. We will also talk about add-ons like hired-in plant, breakdown, loss of hire, and cyber extensions for increasingly digital operations. You will see practical steps that help reduce premiums, including GPS tracking, robust security, and operator training. We will not promise outcomes or give personal advice. The goal is simple - help you understand the key points so you can compare options confidently and avoid common pitfalls that lead to claims shortfalls.

Insurance can only do its job when values are accurate and risks are managed.

By the end, you should have a clear view of whether plant and machinery insurance suits your situation, how to size the cover, and which questions to ask before you buy.

What is covered and how it works in practice

Most policies cover accidental damage, theft, fire, flood, and malicious damage to specified equipment. You can insure owned plant, tools, and machinery at fixed locations or across multiple sites. For mobile kit, cover usually follows the item within the UK, often including transit between sites. Hired-in plant can be included, with insurers meeting the hire contract obligations up to agreed limits. Public liability and product liability are usually separate policies, but many plant packages include third-party liability for plant operation on site.

There are optional extensions. Equipment breakdown can cover sudden internal mechanical or electrical failure, separate from accidental damage. Loss of hire can protect expected rental income if an insured event takes plant off the road. Security measures such as approved GPS tracking and immobilisers can earn discounts, and some insurers now reward documented maintenance, operator training, and anti-theft procedures with improved terms.

Claims are generally straightforward: notify the insurer quickly, provide proof of ownership or hire agreements, supply maintenance logs, and share tracker data if theft is involved. Settlements are based on the policy valuation method - new-for-old or market value - and may be reduced if sums insured are too low. Common exclusions include gradual wear and tear, defective design, and unapproved use, such as lifting loads beyond specified limits. For high-risk items like cranes, expect tighter underwriting, higher excesses, and fewer insurer options.

Who really benefits from this cover

Plant and machinery insurance is particularly useful for construction firms, civil engineers, plant hire businesses, and manufacturers using fixed or mobile machinery. If you run multiple sites, operate in theft hotspots, or depend on key machines to meet deadlines, the policy helps protect cash flow when disruption occurs. It is also valuable for contractors who are contractually responsible for hired-in plant and need to evidence appropriate limits and conditions to clients.

It may be less critical for small projects using only low-value handheld tools or short-term hires with insurance already provided by the hire company. However, even then, it is worth checking excesses and exclusions in hire agreements. Where operations rely on automation or connected machinery, consider the interplay between property cover and cyber risk - a targeted digital incident can still interrupt production even if the physical asset is intact.

Cover options you can mix and match

1. Basic - Core Damage and Theft

   • Covers accidental damage, theft, fire, flood, and malicious damage for named items.
   • Settlement usually at market value with standard excesses and security conditions.
   • Suitable for lower-value equipment or sites with tight budgets and basic security.

2. Standard - Mobile Plant and Hired-in Protection

   • Includes transit within the UK and cover for hired-in plant with set liability limits.
   • Choice of market value or reinstatement on qualifying items, subject to accurate sums insured.
   • Better fit for contractors moving equipment between multiple sites.

3. Comprehensive - Reinstatement, Breakdown, and Loss of Hire

   • Reinstatement (new-for-old) where available, plus equipment breakdown and optional loss of hire.
   • Enhanced theft cover with approved GPS tracking or immobilisers - often rewarded with lower premiums.
   • Designed for fleets, higher daily utilisation, and contracts with strict performance requirements.

4. Optional add-ons

   • Increased indemnity periods and extended hire charges
   • Tools and employee tools
   • Own surrounding property and third-party liability arising from plant use
   • Cyber extension for connected machinery control systems
   • Overseas transit and short-term EU use by agreement

Choose the settlement basis first, then set accurate sums insured to match it.

What it costs and the pricing drivers

Insurers do not publish one-size-fits-all pricing. The ranges below are indicative and vary by risk profile, region, and claims history.

A softened 2025 market is rewarding well-managed fleets with better conditions and longer indemnity periods.

Who is eligible and what insurers may ask for

UK-registered businesses that own, lease, or hire plant can usually apply, including contractors, manufacturers, and plant hire firms. Insurers want clarity on what you do, where you operate, and how equipment is secured, stored, transported, and maintained. Expect to provide a schedule of equipment with serial numbers, values, and locations. For hired-in plant, insurers may ask for copies of hire agreements and required liability limits.

Common reasons for decline include missing security measures for theft-exposed items, poor maintenance records, significant undisclosed modifications, or a high frequency of recent claims without corrective actions. High-risk machinery such as cranes may need additional information like lift plans, operator competence evidence, and wind shutdown procedures. Accurate valuations and documented risk controls usually make a material difference to acceptance and price.

From quote to claim - the simple path

1. Gather equipment lists, locations, values, and security details.
2. Request quotes with clear sums insured and cover limits.
3. Choose settlement basis - market value or reinstatement - then finalise values.
4. Add optional covers like breakdown, hired-in plant, or loss of hire.
5. Confirm declarations, provide maintenance and operator training evidence.
6. Receive documents - check conditions, excesses, and territorial limits.
7. If a loss occurs, notify promptly and share proof of ownership or hire.
8. Cooperate with assessors and provide tracker data, logs, and invoices.

The upsides and trade-offs you should weigh

Key checks before you press buy

Review the settlement basis carefully. If your policy pays on market value, ensure sums insured reflect realistic second-hand prices. If you choose reinstatement, confirm whether new-for-old applies to all items or only to those within age limits. Check excesses and how they differ for theft, flood, and crane operations. Read exclusions around wear and tear, unapproved use, and theft when security conditions are not met. Make sure hired-in plant limits and indemnity periods match contract requirements. Ask how renewal pricing is handled after a claim and what risk improvements could maintain favourable terms. Keep valuation evidence and maintenance records ready, as they can speed up claims and reduce disputes.

Alternatives and related cover to consider

1. Contractor’s all risks - Combines works, plant, and site materials cover for construction projects, useful when insuring the whole job rather than equipment only.
2. Equipment breakdown insurance - Standalone cover for sudden mechanical or electrical failure where property damage cover is limited or excluded.
3. Business interruption - Protects income if operations stop after an insured event, including extended hire charges.
4. Cyber insurance - Addresses digital threats to connected plant controls and production systems not covered by property policies.
5. Motor fleet insurance - For road-registered vehicles and low-loaders transporting plant between sites.

Frequently asked questions

Q: Is underinsurance really a problem in the UK? A: Yes. Many businesses still rely on outdated valuations, despite higher materials, labour, and replacement costs. Underinsurance can lead to reduced claim settlements. Annual reviews and professional reinstatement estimates help close the gap.

Q: Will GPS tracking lower my premium? A: Often. Insurers increasingly recognise approved GPS and immobilisers. Some provide material discounts where devices are fitted and monitored, especially for high-theft areas and mobile plant.

Q: Does the policy cover equipment breakdown? A: Not always by default. Breakdown is commonly an optional extension. It covers sudden internal failure, separate from accidental damage. Check age limits, maintenance requirements, and excluded components.

Q: Are cranes harder to insure? A: Generally yes. Cranes carry higher risk profiles, fewer insurer markets, stricter conditions, and higher excesses. Expect detailed questions on lift planning, operator competency, and wind shutdown procedures.

Q: Can I insure hired-in plant under my policy? A: Yes, most policies include a hired-in section. You set limits to match hire contract obligations and choose indemnity periods for ongoing hire charges following a loss.

Q: Does cover include cyber incidents affecting automated machinery? A: Some insurers offer extensions for cyber-triggered physical damage or interruption. However, many digital risks require a dedicated cyber policy to be fully addressed.

Q: How do weather risks affect cover? A: Insurers consider wind exposure, flood zones, and seasonal conditions. Documented procedures for adverse weather can improve terms and reduce claim disputes.

What to do next

Take stock of your equipment, values, and security measures, then compare cover levels side by side. Ask for quotes on both market value and reinstatement so you can judge the trade-offs. Keep the focus on accurate valuations and practical risk controls. Move at your own pace - the right policy is the one that fits your operations and budget without surprises.

Important note

This guide provides general information only and is not personal financial advice. Policy terms vary between insurers. Always read the schedule, wording, and endorsements carefully and confirm sums insured, limits, and conditions before you buy.