Contractors' plant and equipment insurance
The policy that insures a contractor's cranes, excavators, loaders and equipment, owned or hired in, across every site at once. Theft and overturning weigh more than fire.
Contractors' all risks insures the works, not the machines that build them. A tower crane, a 30-ton excavator or a batching plant belongs to the contractor or to a rental firm, moves from site to site, and is insured separately: this is contractors' plant and equipment cover, CPE in the London market. It is an annual floater. The contractor declares a fleet, either item by item with its value or as a blanket value adjusted at year end, and the cover follows the equipment across every site within a defined territory. The frequency losses are theft, above all mini excavators, generators and small tools, and vandalism on sites closed for the weekend. The severity losses are a mobile crane overturning on poor outrigger support and a tower crane collapsing in high wind, which cost the machine and often the neighboring structure. The policy remains property insurance: internal failure of an engine or a hydraulic system belongs to machinery breakdown, granted or not as an extension, and wear and tear, tire damage with no other loss and loss under water are generally excluded. Two points get negotiated. Hired-in plant first: the British CPA hire conditions make the hirer liable for the machine it rents, and the policy has to provide for it, along with the hire charges that keep running during repair. Then the basis of settlement, replacement as new for a young fleet, actual cash value with depreciation beyond that. On public roads, a self-propelled machine in France is still a motor vehicle, and its liability falls under compulsory motor insurance, not under the equipment policy.
Textbook case, in numbers. An eight-year-old mobile crane, replacement value 900,000 euros, overturns. The policy applies depreciation of 6% a year: 8 x 6 = 48%, base indemnity 900,000 x 0.52 = 468,000, less a deductible of 10% of the loss, or 46,800: 421,200 euros. The same month, a hired-in excavator worth 120,000 euros is stolen from a site; theft deductible of 15,000: 105,000, plus two months of hire charges at 4,000, or 113,000. Total paid: 534,200 euros.
CPE, contractors' plant and equipment, contractors equipment floater, hired-in plant cover, construction equipment insurance
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