Plant Equipment and Hire April 2020 | Page 48

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