The module on insured status showed that a crane belonging to a co-insured falls into the category of property belonging to the insureds, which policies exclude. The consequence was not treated: on a large site there are tens of millions of euros of machines, formwork, cranes, batching plants and temporary installations, and none of it is covered by the policy covering the works. It is the site's largest item that this course has never discussed, and it comes under a set of separate contracts nobody assembles.
The reason for that exclusion is technical and not commercial. A construction policy insures works that grow, of single and located value. A plant fleet is a set of mobile assets, which arrive, leave, change site, are hired and sub-hired, and whose value follows no progress curve. They are two different objects of insurance, and an insurer mixing them could rate neither. The separation is therefore justified; what is not is that it goes unnoticed until the first loss.
Three families are distinguished and do not share the same fate. Self-propelled machines, excavators, mobile cranes, loaders, come under a regime close to that of vehicles, with compulsory liability insurance as soon as they travel, and optional damage cover. Non-self-propelled equipment, formwork, scaffolding, panels, props, is covered by a plant or machinery breakdown policy. Temporary installations, site accommodation, batching plant, transformer station, hold an intermediate position and are the most forgotten, although they often concentrate the origin of fire.
Hiring introduces a difficulty of its own, and it is frequent since most machines are hired rather than owned. The hire contract generally places the risks on the hirer for the period of availability, including replacement value as new, which transfers to the contractor an exposure it did not choose and which often exceeds its own fleet. The module on contractual transfer applies here word for word: a burden assumed by contract beyond general law is really carried, and followed only if the policy carries the corresponding extension.
Theft is the dominant loss in this family, and its mechanics are peculiar. A machine stolen from a site is almost never recovered, it leaves the country within days, and the loss is not limited to its value: there is the idling of a work position, the emergency hire of a replacement, and the delay if the machine was on the critical path. The module on the stopped site showed that theft is also the leading cause of loss during a stoppage; here it is one even in activity, because a site is a place where high-value machines spend the night behind a fence.
One must then see what really distinguishes this item from the others: liability arising from the machine. An overturning crane destroys its own value, but above all it destroys what it hits, and what it hits may be the works, a neighboring property or a person. Three regimes then cross on a single event: damage to the machine comes under its own policy, damage to the works under the construction policy, damage to third parties under liability cover, and the same second produced all three. It is the configuration where the absence of one of the three contracts is immediately visible.
That leaves the useful act, and it is one of counting rather than reading. Establish, once, the list of equipment present on site at peak activity, with its value and its status, owned, hired or brought by a subcontractor. That table fits on one page, it almost always reveals a total higher than anyone imagined, and it allows the only check that matters: for each line, which contract answers for damage to that asset, and which contract answers for damage caused by that asset. Two columns, and the empty cells are the subject.
On a bridge project, a mobile crane hired by the main contractor overturns during a maneuver. The crane, replacement value 1.7 million euros, is destroyed; the hire contract places the risks on the hirer at new value. The jib has crushed a span being poured, 2.4 million, and severed a power line supplying a district, the network operator claiming 380,000 euros of repair and 1.1 million for the service interruption. The project runs twenty-two days late. The construction policy excludes equipment belonging to the insureds or made available to them; the contractor holds a plant policy limited to 1.2 million per machine, and liability cover whose non-consequential financial loss is sub-limited to 500,000 euros. Where does it stand?
A single second produced three losses coming under three contracts, and that split must be laid out before counting. The crushed span is the works: the construction policy covers it, 2.4 million, and it is the only line settling without difficulty. The crane comes under the plant policy and not the construction one, which expressly excludes it as an asset made available to an insured: the 1.2 million limit leaves 500,000 euros with the contractor, and one must see where that exposure comes from. It comes not from an insurance choice but from the hire contract, which placed new value on the hirer: a burden assumed by contract, really carried, and covered only to the extent the policy provided. That leaves third parties, and that is where the file turns. The 380,000 euros of line repair is physical damage caused to another, and liability cover pays it. The 1.1 million of service interruption is of another nature: it is financial loss suffered by subscribers who have nothing physically damaged themselves, therefore non-consequential, and the 500,000 sub-limit applies. A further six hundred thousand euros stays with the contractor, on the line nobody looks at because it carries no large figure in the contract. Total uncovered: 1.1 million, on a loss where no cover was declined.
- 01The site's largest item is not covered by the site's policy: machines, formwork, cranes and temporary installations come under separate contracts nobody assembles.
- 02The separation is technical and justified: works grow at a single located value, a plant fleet arrives, leaves and changes site following no progress curve.
- 03Hiring transfers new value to the hirer: it is a burden assumed by contract, really carried, and followed only if the policy carries the corresponding extension.
- 04An overturning crane produces in one second three losses under three contracts: its own, the works', third parties', and that is where the absence of one of the three shows.
- 05The useful act is counting, not reading: list the equipment at peak activity, and for each line say which contract answers for damage TO the asset and which for damage caused BY it.