Dry Hire Insurance – what you need to know

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The typical machinery insurance policy does not include damage waiver cover (extended dry hire) as a standard cover, however it can be added as an optional extra. Here is how it works:

Standard Dry Hire Insurance (No damage waiver cover)

If your client (the person hiring the item) damages your item, they are now responsible for those damages. Usually in this case the insurer will pay for these damages but they will then attempt to recover their costs from your client as they were responsible. It is recommended that your client should have insurance in place for the item/s they are renting from you.

Extended Dry Hire Insurance (With a damage waiver)

If you include a Damage Waiver into your hire agreement and charge your client a fee for this, the insurer will not seek to recover any costs from your client if they cause damage to the item.

However, it is important to note that this coverage typically comes with an extra premium and any claims may impact your claims history and premiums in the future.

Hire Agreement

A hire agreement is a legally binding contract between the owner of the equipment and the person hiring it. This agreement outlines the terms and conditions of the hire, including the duration of the hire, the cost of the hire, and any specific requirements or restrictions relating to the use of the equipment.

Having a comprehensive hire agreement in place can help to protect both the owner of the equipment and the person or company hiring it. It can also help prevent any misunderstandings or disputes during the hire period.

As they are of a contractual matter, a lawyer experienced in preparing hire agreements for the mobile plant industry should be engaged to draft an agreement tailored to your needs.

Damage Waiver

Damage waivers are clauses or conditions that can be added to a hire agreement. The purpose of a damage waiver is to protect the person or company hiring the equipment from financial responsibility in the event of damage or loss to the equipment during the rental hire period. (Subject to your Insurance Policy)

The cost of a damage waiver is usually calculated as a percentage of the rental cost of the equipment, and can vary based on the type of equipment, duration of hire, and the level of coverage provided.

Speak to the experts

Your hire agreement will also describe what insurance you’re providing and the risks to the hirer. We recommend that you work with your broker to understand the best options to suit your needs. Having a properly drafted Dry Hire Agreement is essential for protecting your rights, limiting your liability and avoiding unnecessary disputes, so it’s important to seek legal assistance when preparing one.

Any financial product advice in this content is provided by cgib AFSL No. 231183. This material is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Accordingly, before acting on it, you should consider its appropriateness to your circumstances. cgib respects your online time and privacy.