Tradesman Insurance for Excavators and Earthmoving

What to look for in commercial earthmoving equipment insurance policies

If your business operation depends on certain equipment, it’s a good idea to insure it. Cover for earthmoving equipment will generally be tax deductible, as will insurance for other tools your earnings are dependent on.

If you can’t afford to replace lost or damaged equipment out-of-pocket, then this kind of insurance is a crucial investment. Accidents happen, and after spending more time in business the odds of one happening to you increase.

Often, the same policies can cover contractors, principals and generally anyone who’s going to be operating the equipment, or responsible for someone else who is. This guide explains what kind of cover you can find, what to look out for and how to save money on your tradesman insurance.

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What’s covered by insurance for earthmoving equipment

You’re generally covered up to the value of a machine, and policies will specify that you’re entitled to the cost of repairs or replacement in the event of damage or loss.

Many policies are designed to be more holistic business insurance for tradesmen, and as such will also include a range of professional and personal liability cover. If you don’t have this kind of cover through another form of business insurance it’s an important inclusion to look out for.

Depending on the insurer, this kind of cover can also include a range of other materials and equipment, both stationary and mobile. These will generally be insured against loss or damage in a similar way to your earthmoving equipment and other machinery.

Specifically for equipment, policies will generally:

  • Cover the cost of damage to insured equipment and materials specified in the policy, up to either the market value or an agreed sum.
  • Cover accessories and related equipment, such as radios, ropes, tarps, tools and similar, up to a sub-limit specified in your policy.
  • Include cover for trailers if needed. For example, mini-excavator insurance policies will often let you cover a plant trailer under the same policy.

The types of loss covered can also vary between policies, and may include:

  • Fire
  • Theft
  • Accidental damage
  • Explosion
  • Lightning strike
  • Storms and flooding
  • Other kinds of equipment or property damage
  • Liability damages and more

The liability cover with heavy-equipment insurance

These policies often include liability insurance, which is important for businesses. This type of cover can vary widely, and generally pays out in the event of you being held legally liable for something.

  • Damage to third party property
  • Injuries to third parties
  • Injuries to subcontractors or employers which you may be held liable for
  • The legal costs of defending yourself against liability claims

When operating earthmoving equipment or any other heavy machinery, this type of cover is extremely important. For example, a nearby homeowner might accuse one of damaging property through earthmoving equipment vibrations.

Depending on the policy, the cover might be extended to different situations. Some of the cover you might find includes:

  • Damage or injury caused by insured equipment only
  • If you are liable for damage to materials, such as property dropped while being lifted or suspended
  • Broadform liability insurance (covering public and product liability) for cover against accusations of harassment, discrimination or other business hazards
  • Liability for damage caused by dangerous goods or hazardous materials legally in your possession
  • Your liability for the costs of preventing pollutants from spreading, or cleaning up
  • Indemnity insurance for your liability in the event of faulty workmanship or products delivered by you

It can be a good idea to consider your liability cover in line with your business activities. For example, if you regularly transport a third party’s goods then it’s a good idea to check how they’re insured while you are liable for them.

Additional options to consider

You can find a range of other options and features with policies. Sometimes they will be included automatically, while other times they will only be optional features, or unavailable.

  • Removal of debris: The costs of debris removal associated with claims
  • Accidental overload: Insurance for accidents resulting from non-deliberately overloading equipment.
  • Pipes and cables: Insurance for accidental damage to underground pipes and cables, and sometimes your liability for damage resulting from the escape of liquid, gas or whatever else it was carrying.
  • Damage to your equipment that you are hiring out: If your business involves renting out earthmoving equipment or other machinery, you can get it covered under the same policies.
  • Employee property damage: Insurance for damage to employee property.
  • Locks and keys: Rekeying a vehicle in the event of key theft.
  • Expediting costs: Additional payment for speeding up repairs as reasonable.
  • Consequential damages: Payment for financial losses resulting from an insured event. For example, replacement income payments while you are unable to work due to a destroyed vehicle.
  • Personal accident cover for an injured operator: Accident insurance for an equipment operator’s injuries
  • Transport: The cost of transporting equipment in relation to an insured event.
  • Replacement vehicle hire: Cover for the cost of hiring a replacement vehicle while the insured item is unusable.
  • Emergency services cover: Covers the costs of emergency services attendance, such as if you are liable to pay a fee for police or fire services attendance.
  • Additional injury benefits: Policies can also pay out specific benefits in the event of equipment operators suffering disabling injuries.

Exclusions to be aware of

All cover will include exclusions, which will vary between policies. Some of the features which are included in one policy may be specifically excluded by another, such as liability expenses. Some of the main exclusions you may find are:

  • No cover for damage caused by acts of war or terrorism
  • No cover for vehicles that were not registered
  • No cover for equipment being operated outside the bounds of the law in your state or territory, or outside its specifications unless otherwise stated by your policy (eg, with accidental overload cover)
  • No cover for damage caused by wear and tear, deterioration, rust or corrosion of any kind
  • No cover for damage caused by a failure to maintain your equipment
  • No theft cover for equipment or items that were not properly secured

The excess and costs

One or more excess charges might apply to your policy. This is an amount which will need to be paid in the event of a claim. These can include:

  • Standard excess: The standard excess applicable to most claims under your policy.
  • Age or inexperience excess: An additional excess payable when equipment was under the control of a young or inexperienced operator.
  • Tipping excess: When the insured vehicle is a tipper or tipping trailer whose hoist was extended at the time of an accident.
  • Special excess: An additional excess which may apply to certain items or claims made under a policy. For example, one policy will charge another $500 excess for claims for damage to underground pipes or cables.

Factors which impact the cost of your premiums

Your premiums are impacted by a range of factors depending on the insurer and the policy. Generally these will include:

  • The type of cover you have chosen, including options and features
  • The sum insured, or market value of your insured items
  • The age and driving experience of all operators
  • Where and how insured items are used
  • The types of loss covered under your policy
  • Where insured equipment is stored when not in use
  • Your previous insurance and claims history

If you’re a higher risk, and are more likely to make claims at some point, you can expect higher premiums.

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Andrew Munro

Andrew writes for finder.com, comparing products, writing guides and looking for new ways to help people make smart decisions. He's a fan of insurance, business news and cryptocurrency.

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