HIRE
HIRE COMPANIES NEED
TO BE SURE ABOUT INSURANCE
As an equipment hire company there are many factors to consider when signing an insurance
contract, Danie van Aswegen, commercial sales executive lead at B-Sure Africa Insurance Brokers
tells Leon Louw.
Danie, what are the requirements an
equipment owner needs to comply
with to qualify for insurance?
When you acquire plant and equipment with
the intention of hiring, there are a number of
requirements you will need to comply with
before the broker will sign the contract. One
of the most important requirements is that
the equipment owner takes all reasonable
precautions to safeguard the plant overnight.
This can be done, for example, by erecting
adequate fencing with lockable gates and
security guards. Tracking devices in high-
theft areas is key.
It is critical that the operators of your
equipment are experienced. Owners need
to make sure that operators are aware of
the limits within which the equipment can
operate. Moreover, they need to ensure,
and validate, that operator’s licences and
permits are valid and that they can operate
the relevant machines.
Additional information hire companies
should be aware of, is that consumable
parts like tyres, batteries and fuel, amongst
others, are not covered. Spare parts and
accessories must be declared separate to
the sum insured. Another important point
is that the machinery is used only for the
purpose of what it was initially intended
to do.
What are the challenges plant and
equipment owners face when they
want to insure their assets?
They need to carefully consider and
understand the basis of the insurance
between New Replacement Value (NRV)
and Market Value (MV) where NRV is
new parts for partial losses and current
market value at the time of a total loss.
MV is second-hand parts for partial losses
and current market value at the time of
the total loss. If no second-hand parts are
available, then betterment will be applied
to the new parts supplied. The average will
be applicable to both bases of insurance.
46
APRIL 2020
It is best to get a qualified engineers
evaluation done at least every three years
for larger fleets.
What are the potential pitfalls to look
out for once they hire their equipment
and how easy or difficult is it to submit
a claim?
A Contractors Plant Hire Association (CPHA)
agreement must be in place between the
rd
owner and the 3 party renting the plant.
The insurer terms and conditions will apply
irrespective of the plant being hired with or
without an operator.
It is critical that the operator has an
applicable and valid permit to drive such
plant. Plant hired in may not be hired
onwards. Some insurers will also exclude
absconsion; dishonest, malicious or illegal
acts of any party hiring or leasing the
property insured.
Proper credit checks, police clearance
and verifications of the customer must be
done and recorded to ensure hassle-free
claims submissions.
What is an insurance company’s
requirements when it comes to
operators of machines? Do they
check operator backgrounds and
qualifications?
Plant can be rented out with or without
the plant owner’s operator, as long as
there is a CPHA agreement in place and
as long as the operator has the applicable
valid operating permit. On submission of
any claim the operator’s background and
qualifications will be checked and verified.
No plant hired in can be hired onwards and
plant hired out with an operator cannot be
operated by another person.
What are the risks for plant hire
companies in terms of liability, losses
and claims?
When plant is being driven on public
rd
roads, there needs to be 3 Party and
own damage road risk cover in place in
rd
case such plant collides with a 3 party
vehicle. The operation of such plant should
be incidental in such cases only and the
operator and plant fully complaint with the
National Road Traffic Act. Site liability should
also be taken out for liability claims on site
where the plant is operating.
Who carries the liability in the
transportation of equipment?
Most insurers’ policies will cover the plant
item in transit on a trailer, low bed and
Heavy Commercial Vehicle (HCV), amongst
others, be it the insured vehicles or a
rd
contracted 3 party’s vehicle. Alternatively,
a transport contractor can offer goods in
transit insurance for an amount equal to
the market value of the entire load should a
total loss be suffered.
Please provide a list of the products
and services your company offers.
• General Commercial Insurance
• Agriculture
• Heavy Haulage
• Goods in Transit
• Hospitality
• Fuel Stations
• Engineering
• Personal vehicles, contents and
buildings
We are also able to arrange cover for
contractors all risks, public liability stand
alone, stud animals or other wild game,
special events, value-added products such
as pothole cover, and excess reducers.
B-Sure Africa Insurance Brokers
is an independent broker that has
partnered with a multitude of South
Africa’s top insurers providing tailor-
made options designed for unique
businesses.
www.equipmentandhire.co.za