How Work Site Risks and Accidents are Causing Machinery Insurance Prices to Rise
There have been many reports of machine insurance costs rising in recent months, but why should this be? What are the factors that influence the cost of heavy machinery insurance, and what can you do to keep your costs down?
These are questions that we will be looking at in the article that follows, so let’s begin by talking about the various factors that can have an impact on your machinery insurance costs.
Influences on Machinery Insurance Costs
For a detailed look at machine insurance, we recommend you check out fastmachineryinsurance.com.au as they are experts in the field and there’s plenty of informative content to look at there. Meanwhile, let’s look at the main factors that influence insurance costs in the industry.
The Risk Factor
Insurance is always governed by the risk factor. This is why heavy plant will cost more to insure than, for example, a small commercial vehicle. Heavy machinery is a term that covers many different types of equipment, and the risk involved with each will be different. An insurance assessor will consider the evident risk with a certain machine, and that will be built in to the calculations that determine the cost.
Higher risk of damage or accidents – and especially of injury – mean higher insurance costs, so it is certainly worth assessing your own machinery for risk and doing all you can to reduce that. Send your operator on a health and safety course or an advanced training course in the use of the machine and agree with your insurer that only select persons will operate each machine, and you may see a reduction in your policy cost.
Fraud and Theft
In all industrial buildings and on sites insurance is essential especially as protection against theft and fraud. Fraud is not a common problem with industrial machinery, but theft certainly is. A recent report showed that, for example, theft of GPS enabled agricultural machinery is becoming more commonplace, and when reports of this sort are published the rates rise.
Theft from construction sites is surprisingly common, especially where heavy plant has to be left on site overnight. No security measure is 100% secure, but you need to show your insurer that you have carried out every available security measure to protect your plant from theft and vandalism. Once they are satisfied that you have done so your premium will reduce.
The Place of Work
Another influence on the cost of an industrial insurance premium is that of your place of work. By this we mean two things: the actual building or site, and the location. Just as with some domestic locations certain areas have a higher risk of theft, and this will apply to commercial and industrial addresses also. If incidences of crime are high in the area where you are constructing, then the insurance on your machinery will be higher than in a low-risk area.
If the site is complete with numerous hazards, then additional weight will be put on the risk of accidents, and this will add to the cost. The same applies if you are working in a hazardous or poorly maintained building. There is little that can be done other than to ensure you have put in place procedures for reducing the effect of any hazards and demonstrating this to the insurance company.
Security System
As with a home or car, a good security system will help keep your machinery insurance costs as low as possible. This applies to systems attached to vehicles and equipment as much as to the site itself. The best security for a construction site is to have a couple of guards on site at all times. This may be an expensive measure, but it is a proven success.
For industrial buildings an alarm and surveillance system is essential and will deter those looking to break in, while it can also be used to view film of accidents that happen on site and assess how to prevent them from happening again.
Prior Claims
If you have made prior claims for insurance pay-outs for accidents, for example, that area of your insurance will cost more. The way an insurer looks as it is that if an accident has occurred, it is more likely that others will happen. It may seem that this is the wrong way around, but in fact it is a statistical fact and statistics are used to assess risk. Your insurance policy cost will always rise when you make a claim, so we recommend you talk to your insurer about how best to minimise this risk.
Insurance is about assessing various risks and coming to an agreement, so make sure you have everything in your policy that applies, and also that you are not paying for clauses that do not cover your business type as this is a common mistake with insurance policies.
