April 30

The Best Heavy Equipment Insurance Checklist


Heavy equipment insurance isn’t something everybody talks about. However, if you’re a business owner who relies on heavy construction equipment you’ve likely asked an important question. 

“How do I insure my equipment?”

This type of equipment includes bulldozers, lift trucks, cranes, or front loaders. Whether loaning or renting, navigating heavy equipment insurance can feel like a chore without having the right checklist. In this line of business, you are exposed to a significant amount of risks associated with operating these giant machines. The more equipment being used, the more likely something will eventually go wrong.

Therefore, equipment insurance is all the more vital. 

Here are some types of heavy equipment:

  • Bulldozers
  • Boom Lifts
  • Lift Trucks
  • Excavator
  • Cranes

Proper equipment insurance is a must for saving yourself from potential machinery breakdowns, and other losses. Below, we have compiled the ultimate checklist to help you find the right heavy equipment insurance today.

1. Equipment Breakdown Insurance

Disasters are unpredictable and can happen even when we think we are well-prepared. When a critical situation takes place and causes a standstill, this adversely affects your business. Lower productivity and unwanted costs are but two factors that result from equipment failure.

The solution is getting equipment breakdown insurance (also known as “boiler and machinery” insurance). This covers the risks usually excluded from other property insurance policies. This coverage protects construction companies from sudden, unforeseen damages and common setbacks, including explosions, malfunctions, and breakdowns caused by fires, storms, and other natural disasters.

Equipment breakdown insurance covers a wide range of equipment types. Examples include electrical equipment, air conditioning systems, hot water boilers, sterilizers, generators, and more. 

Depending on whether or not an insured item is repairable, the basis of compensation can be either partial or total. Best practice is to contact your insurance agency to find out which of your heavy equipment falls under this insurance.

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2. Additional Policy Coverage

A thorough risk management process does not stop at getting basic equipment breakdown insurance. That’s only the first step. Keep in mind that this coverage only takes care of the costs associated with repairing and replacing the impaired machine. You also need to think about other indirect damages and interruptions that can (and very often) spring up because of the broken equipment.

Here are some additional coverages that you might want to consider adding to your equipment breakdown policy.

  • Business Interruption: The loss of income can sometimes cost more money than the expense of broken equipment. As a result, if your business operation is suspended due to a breakdown, this additional coverage can protect your company against loss of income and continuing expenses.
  • Spoilage: Designed specifically for food processing companies, this coverage provides protection against loss of expenses resulting from an accident.
  • Contingent Time Element: This coverage offers indemnity for loss to your customers or suppliers as a consequence of equipment breakdown.
  • Rental Reimbursement: Coverage under this policy handles the cost of renting a replacement until the damaged machine is fixed or you’ve acquired a new one.
  • Sub-limited Coverage: Depending on particular business needs, there are coverages designed for specific sub-limits, such as hazardous substances, water damage, medical supplies, data restoration, ammonia contamination, and more.   

3. Leasing Your Heavy Equipment to Other Businesses

If you are leasing your heavy equipment, it is still important to get insurance – even if you are not responsible for repairing the leased equipment. Bear in mind that while many policies cover equipment that you own or loan to others, they may not cover your equipment while in the process of being loaned. 

Make sure you understand your policy by contacting your insurance agency before leasing your equipment.

Contingent and excess liability insurance is a common coverage policy that protects the lessor’s interest. This coverage typically applies when the lessee’s policy is being denied or if the lessee is underinsured. For example, if the lessee is involved in an accident and they fail to maintain adequate insurance required by the lease agreement, this coverage can protect the lessor.

Assent insurance, on the other hand, is necessary in case the lessee’s insurance does not cover the leased equipment. Under this coverage, the borrower is offered a convenient option to meet the insurance requirement of the lease. As a result, your business will be able to pass the cost of insurance to the lessee, which helps you prevent vicarious liability claims for accidents caused by the use of leased machinery.   

4. Construction Insurance Companies

Heavy equipment is essential for construction companies. Therefore, if your business falls under this category, insurance is going to be a must. Naturally, the available policies and pricing will vary from company to company. The best way to discern what insurance fits your needs is to know the size of your company and your equipment. Then you can figure out what needs to be covered.

Match what you own with the company’s policy. Then you’ll be well on your way to getting covered. If you’re looking for a head start on the search, here are some potential options for your construction business.

Construction Business Insurance Companies


  • Policies can cover inland marine, general liability, commercial auto, and more.
  • Offers discounts depending on the client’s business.

ENGS Commercial Finance

  • Nationwide service, available since 1952.
  • Provides an online list of eligibility and coverage options.

US Assure

  • Policies cover commercial general contractors, agricultural, excavation, and others.
  • Covers a multitude of heavy equipment in all American states (minus Hawaii).

5. Utilizing Heavy Rental Equipment

Important to note – if your business relies on leased equipment to operate (you are renting equipment from someone else), you can be held liable for damage to the equipment. Many machinery lenders do not have coverage under their own contractors’ equipment policy. 

Furthermore, even if your equipment lessor is responsible for fixing machinery that’s down, you won’t get compensated for lost revenue resulting from business interruptions and indirect damages. In this case, you need to go the extra mile to get your own rental equipment coverage as it helps your business cover the loss during unexpected shutdowns. It’s important to review your contract thoroughly when renting heavy equipment. 

Depending on your state, there will be different regulations applied. Likewise, rental equipment insurance policies vary based on type of machinery and risk involved. Some rental businesses may ask that you purchase a policy on the equipment to cover its use.

Consult your insurance agency to explore different heavy equipment insurance options that can ensure your legal responsibility is well covered. They can also call the leasing company and speak to their insurance people on your behalf to find out more details regarding their policy.

Initially, you might feel overwhelmed finding the right insurance for your heavy equipment. Depending on your particular situation and needs, there are definitely different rules to follow. With that said, getting coverage for your construction machinery is vital for risk management.

Direct and indirect losses from equipment shutdowns can be detrimental to your bottom line. This could cause delays in your project’s timeline and making your productivity suffer. It’s highly recommended that you seek professional help to discuss the proper coverage for your heavy equipment and better manage your risks. 

With enough time and effort, along with this handy checklist, you can make equipment insurance yesterday’s problem and today’s solution.


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