Who needs this solution
- Construction companies – excavators, loaders, bulldozers, cranes, concrete pumps;
- plant hire companies – with the specific question of who answers for damage caused by the hirer;
- forestry contractors – harvesters and forwarders working in an environment with an elevated fire risk;
- farmers – tractors, combines, self-propelled machinery;
- lessees under finance leases – the lessor normally requires full cover throughout the term.
The main risks
| Risk | Example | Does standard motor cover respond? |
|---|---|---|
| Damage during work | An excavator overturns in a trench; the boom strikes a structure | Often not – motor cover is built around road traffic |
| Fire | A harvester catches fire in a felling area from overheated components | Partly; forestry work often carries exclusions or requirements |
| Theft from site | Plant or its attachments stolen from a site overnight | Often subject to conditions on security and storage |
| Damage in transit | Plant slides off a trailer while being loaded | Depends on the policy – often a separate exclusion |
| Natural perils | A storm topples a crane; flooding reaches plant on a low-lying site | Partly, with sub-limits |
| Hirer or operator error | Incorrect operation damages the hydraulics or the engine | Usually not; and under CPM only with specific wording |
What a CPM policy can cover
Depending on the cover chosen, the policy can provide: damage to and destruction of the plant while working, standing and moving (including transit between sites), theft and robbery, damage from natural perils, and extensions – for example recovery and extraction costs, cover for hired-in plant, additional equipment and interchangeable attachments. The precise scope depends on the insurer's wording and the special conditions of the policy.
What a standard quote often overlooks
- The boundary between motor cover and CPM. For plant that both travels on the road and works on site, you have to check which cover responds at which moment – so that no "gap" is left between the two.
- Territory and storage. Policies tend to require a guarded compound overnight – in a forest or an open field that cannot be complied with, and it has to be addressed in advance.
- The transit exclusion. Plant is most often damaged precisely during loading and transport – that cover has to be clearly included.
- Interchangeable attachments and additional equipment (buckets, shears, GPS units) are often not included in the base value.
- Hire arrangements. If you hire plant out, you need to know whether the policy covers damage caused by the hirer and how the deductible is structured – or whether the risk has to sit with the hirer's own policy.
- Valuation of older plant. Disputes over market value at the time of a claim are the most common source of conflict – the basis of valuation has to be fixed in the policy.
Decision table: what to check in a CPM quote
| Question | Why it matters | What to check | What happens if you do not |
|---|---|---|---|
| Does the cover respond during work? | Most losses happen while working, not while driving | The operative cover wording, exclusions for types of work | The main risk stays uncovered |
| How is the value of the plant defined? | It determines the amount payable on a total loss | Reinstatement or market value, application of depreciation | The payout does not cover the cost of replacement |
| What are the storage and security requirements? | Requirements you cannot meet mean a declinature on a theft claim | Whether the requirements match real working conditions | A declinature on a technical breach |
| Are transit and recovery included? | Lifting a machine out of a ditch can cost thousands | Transit cover, limit for recovery costs | Substantial unplanned costs |
| What deductible applies to each peril? | Theft and natural perils often carry different deductibles | The deductible table by peril | An unexpectedly large share of the loss falls on you |
Information and documents required
- Equipment list: make, model, year, serial number, value
- Description of use: types of work, sites, seasonality
- Description of where plant is kept overnight and between seasons
- Information on transport between sites
- Requirements of any lease or hire contracts, where applicable
- Loss history for recent years
What drives the price and the terms
The main factors: the type and value of the plant, the work profile (forestry and work near water carry higher risk), the age of the plant, storage and security arrangements, the deductibles chosen, the extensions taken and the company's loss history. Fleets with a good record can usually obtain substantially better terms than a single unit.
Typical exclusions
CPM usually does not cover: internal mechanical and electrical failure without an external cause (partly addressed by machinery breakdown cover), wear and gradual deterioration, damage arising from knowingly operating defective plant, and operation contrary to the manufacturer's instructions. The operator's liability towards third parties has to be assessed separately – that sits under a different type of policy.
How I work with plant risks
I start with how the plant is actually used – because the mismatch between what the policy assumes and what happens in reality is the most common cause of declinatures. Then I structure the cover (what belongs to motor, what to CPM, what to liability), obtain and compare quotes on substance, and negotiate the conditions that are critical to your work – storage requirements, transit, attachments. In the event of a claim I represent you through to payment.
A practical example
A typical situation (a generalised example, not a specific client's case): a forestry contractor's harvester works in a felling area 40 km from the nearest settlement. In the cheapest quote, theft cover applies only in a "guarded compound" – a requirement that cannot be met in a felling area on any night. In negotiation that condition can be replaced with requirements that are genuinely achievable (GPS tracking and an ignition immobiliser, for example) in the environment where the machine actually works.
Frequently asked questions
How does CPM differ from motor own-damage cover?
Motor own-damage cover insures vehicles and is designed primarily for driving on public roads. CPM is plant and machinery insurance, which also covers the machine while working, on site and in transit. For plant that both drives and works, it is important to check that the two covers meet without a gap.
Does CPM also cover hired-in plant?
It can be arranged – both as an extension of your policy for plant you hire in and, the other way round, when you hire your own plant out, cover for damage caused by the hirer can be agreed. Conditions differ substantially between insurers, so I always disclose hire arrangements to the insurer openly.
Will the policy respond if plant is left on site overnight?
That depends on the policy's storage and security requirements. If they do not match real conditions (forest, open field, unguarded yard), a theft claim can be declined – which is why I align those requirements with the actual working environment before the policy is issued, not after.
How is the payout calculated if plant is a total loss?
According to the basis of valuation fixed in the policy – market value or another agreed basis. This is precisely the most common source of dispute for older plant, so the basis of valuation and the application of depreciation need to be known before signing, not at the time of a claim.
Is the lessor's minimum requirement enough for leased plant?
Lease requirements set a minimum that protects the lessor – not necessarily your business. Downtime losses or interchangeable attachments, for example, are usually not included in that minimum. It is worth assessing what is critical to your operation and topping the programme up accordingly.
Insurance broker, partner at SIA EURORISK. 18+ years in insurance. About me →
Methodology and sources
This page combines the Latvian legal framework with a broker's practice. The practical observations (for example, the typical gaps in cover) are Kristaps Račko's professional observations, not market statistics; the actual cover always depends on the chosen insurer's wording and the special conditions of the policy.
- Kristaps Račko's practice as a broker – comparing CPM and plant cover; the specific policy wording and its special conditions always govern
This page provides general information about plant and machinery insurance and is not individual insurance advice. Actual cover always depends on the chosen insurer's wording, the special conditions in the policy and your situation – we will assess those together before any decision.