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As a business owner in the earthmoving or construction industry, you may be familiar with the term “dry hire.” This refers to the practice of renting out equipment to other businesses or individuals without providing an operator or any additional services. If you are involved in dry hire, it is important to understand the risks that come with it and to have appropriate insurance coverage in place.

What is Dry Hire?

Dry hire refers to the rental of equipment without an operator or any additional services. This can include everything from earth-moving machinery to generators, scaffolding, and more. In contrast, wet hire involves renting equipment with an operator and may include other services such as maintenance and fuel.

Types of Dry Hire Insurance

When it comes to insuring dry hire equipment, there are two main types of insurance to consider: subrogation and damage waiver.

Subrogation insurance means that the hirer is responsible for any damage or loss caused to the equipment while it’s in their possession. This type of insurance means that if the equipment is damaged or stolen, the owner can claim the hirer for the equipment to recoup their losses.

If the hirer accidentally damages the equipment, the insurer will cover the cost of repairs and then send a bill to the hirer for reimbursement.

Damage waiver insurance, however, refers to an all-inclusive cover for the hirer and owner. This means that if there is damage to the equipment, the hirer will not be responsible for the cost of repairs or replacement. Damage waiver provides the hirer peace of mind. However, it can also lead to higher premiums for the owner.

For a damage waiver to be valid, it must be included in the hire agreement, stating that the hirer is covered under the owner’s insurance policy.

an excavator on the construction

The Questions We Should Ask When Organising Dry Hire Insurance

When organising dry hire insurance, there are a number of questions that businesses should ask to ensure they are getting the coverage they need. Some of these questions include:

  • What types of equipment are covered under the policy?
  • What is the coverage limit for damage or loss?
  • What is the excess on the policy?
  • What types of liability claims are covered?
  • What is the claims process?

Besides equipment insurance, what other covers do dry hire companies typically take out?

In addition, to dry hire insurance, there are a number of other types of insurance that dry hire companies typically take out. One of the most important is liability insurance, which covers the business for any claims made against them for injury or property damage caused by the equipment they are renting. Other types of insurance that may be relevant include workers’ compensation insurance, business interruption insurance, and commercial property insurance.

Why is Public Liability Insurance Important for Dry Hirers?

As a dry hirer, you are responsible for the equipment you rent out to clients. In the event that the equipment causes injury or damage to a third party, you may be held liable for the damages. Without proper public liability insurance coverage, your business may be exposed to significant financial losses, legal fees, and compensation payouts.

For example, if a piece of equipment you rented out to a client malfunctioned and caused property damage or injury to a third party, you could be held responsible for the damages. Public liability insurance would cover your business for any compensation payouts or legal fees that may result from such claims.

In addition, many clients may require you to have public liability insurance as a prerequisite for doing business with them. Having proper public liability insurance coverage can therefore be essential for securing contracts and growing your business.

What are the Costs of Setting up an Insurance Policy for Dry Hire?

The cost of setting up an insurance policy for dry hire will depend on a number of factors, including the type of equipment being rented, the level of coverage required, and the business’s claims history.

To get an accurate quote, businesses should speak to an insurance broker who specialises in dry hire insurance. They will be able to provide tailored advice and help businesses find the right coverage at a competitive price.

At Truck Insurance HQ, we have over a decade of multi-award-winning experience in the truck, transport, and earthmoving equipment insurance sector. We offer comprehensive cover tailored specifically to your dry hire needs, competitive rates, and a team of experts who are always here to help you.

Trust us to protect your business from potential losses caused by theft, damage, or accidents. Request a quote today or call 1300 815 344 to see how we can help you.

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