2022 Market Update – Plant & Equipment
After a turbulent period following the effects of the global pandemic, we expect 2022 will see growth in the construction industry. Increased government investment in infrastructure development and a boom in residential and commercial construction in Australia has seen increased demand for mobile plant, equipment and machinery within the construction sector.
Engineering, construction, mining and agriculture projects typically require the use and or hire of mobile plant, equipment and machinery on site. Given the busy and complex nature of these industries and sites where such assets are operated, claims are frequent. With an uplift of construction activities and usage of new technology and sophisticated machinery with high insurable values, claims tend to be of high value and complex in nature. Given delays due to the pandemic where global supply chains are disrupted, we have observed a rise in repair costs attributed by demands of sourcing for parts and accessories.
Where mobile plant, equipment and machinery is unregistered or not operated on public roads, it is prudent that such assets are insured for material damage under an Industrial Special Risks/Property policy. Regarding risk transfer for larger fleets, where there is material damage and road risk liability, it is preferable to insure these assets under a contract works or plant and equipment policy.
We foreshadow no significant changes to insurance carriers nor capacity issues across the class. Coverage for mobile plant, equipment and machinery assets remains a preferred class of business. Increased excess structures can also assist policyholders reduce premium.
Policyholders should invest in vehicle safety, driver aid and training programmes. Policyholders with positive claims histories, loss ratios and demonstrated loyalty to their insurer (see our article here) will benefit with steady coverage and premium rates for this class of insurance.
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