Dry hire insurance - protecting your equipment and your business
When your equipment is in someone else's hands, the right insurance makes all the difference
Comprehensive insurance for your plant and equipment
Plant and equipment insurance protects your machinery against accidental damage, theft, fire, and breakdown — whether owned outright, under finance, or hired in for a project. We compare policies across a large panel of insurers to find the right cover for your specific equipment and how you use it.
Accidental damage
Covers sudden and unexpected physical damage to your equipment during operation, transport, or when parked on site.
Fire and explosion
Covers damage caused by fire, explosion, or lightning — on site, in transit, or in storage.
Theft and attempted theft
Covers the cost of replacement if your equipment is stolen from a site, yard, or trailer — including attempted theft damage.
Malicious damage
Covers deliberate damage caused by third parties — vandalism, sabotage, or intentional acts on your machinery.
Damage waiver
Protects clients who hire your equipment from subrogation claims — the insurer cannot pursue the hirer for accidental damage costs.
In transit cover
Covers your equipment while being transported between sites — on a trailer, float, or low loader.
Hired-in plant
Covers machinery you hire in from another party — your liability for damage to equipment you do not own but are responsible for.
Breakdown cover
Covers mechanical or electrical breakdown — available as an add-on for selected equipment types and policy structures.
Windscreen and glass
Covers cracked or broken cab glass on excavators, bulldozers, and other enclosed machinery — without affecting your no-claims record.
How damage waiver insurance works for dry hire companies
Damage event — what happens next depends entirely on the hire agreement
This is the moment the damage waiver either protects everyone involved — or leaves the client exposed to a direct recovery claim from the insurer.
✓ With damage waiver protection
Dry hire company has damage waiver cover in place
Client reports the damage
Client notifies the dry hire company of the accidental damage to the excavator.
Dry hire company lodges a claim
The dry hire company claims the damage under their own plant and equipment insurance policy — the damage waiver clause covers the client's liability.
Insurer pays the dry hire company
The insurer pays for the repair or replacement of the damaged machine directly to the dry hire company.
Client is protected
The insurer does not pursue the client for the cost of damages. The damage waiver waives the right of subrogation against the hirer.
✗ Without damage waiver protection
No damage waiver clause in the hire agreement
Dry hire company lodges a claim
The dry hire company claims the damage under their own plant and equipment policy as normal.
Insurer pays — then exercises subrogation
The insurer pays the dry hire company for the damage, but then exercises its legal right of subrogation — pursuing the client directly to recover the cost.
Insurer goes after the client
The client receives a recovery demand from the dry hire company's insurer for the full cost of repairing or replacing the excavator — often tens of thousands of dollars.
Client liable for the full cost
If the client does not have their own public liability or hired plant cover, they are personally liable for the full repair or replacement cost.
Do I need public liability insurance for my dry hire business?
Yes — public liability insurance is essential for any dry hire business. When you hire out equipment without an operator, your client is responsible for how the machine is used — but if something goes wrong and a third party is injured or their property is damaged, the claim can still come back to you as the equipment owner. Here are the three most common liability scenarios dry hire businesses face.
"A customer hired a mini excavator and injured their foot while operating it incorrectly. They made a personal injury claim against our business."
Personal injury claims
If a customer, bystander, or member of the public is injured as a result of your hired equipment — whether through operator error, a mechanical defect, or an incident on site — public liability covers your legal defence costs and any compensation awarded against your business.
"A customer reversed a hired skid steer into a nearby vehicle on site, damaging the panels and bumper. The vehicle owner made a claim against our dry hire company."
Third-party property damage
When a client operating your hired equipment accidentally damages another person's property — a vehicle, a fence, a building, or infrastructure on site — public liability insurance covers the cost of repairs or replacement and defends any claim made against your business as the equipment owner.
"During excavation, a hired bobcat caused ground vibration that cracked a neighbouring property's retaining wall. The neighbour lodged a damages claim against us."
Vibration, removal and weakening of supports
Excavation and earthmoving equipment can cause subsidence, ground movement, or structural damage to neighbouring properties — even when operated correctly. This specialist extension of public liability covers claims arising from vibration, removal of support, and weakening of surrounding structures — a critical cover for dry hire businesses with earthmoving equipment.
Public liability for dry hire businesses needs to be specifically structured around your hire activities — not a generic business policy. We compare policies across a large panel of insurers to find cover that responds to equipment hire scenarios, includes the right extensions, and meets the minimum limits required by your hire contracts. Most dry hire clients need $10M to $20M in cover as a minimum.
Get a quoteHow Morgan Insurance Brokers can help
Due to the complex nature of Dry Hire Agreements and Dry Hire Insurance, it’s important that you have a qualified Insurance Broker guide you on the terms and conditions of your insurance. For example, a standard dry hire public liability insurance would pursue your client for damages. Does this align with your dry hire contract?
It’s important that your insurance and your hire contract are carefully reviewed to understand what is and is not covered.
We can also provide comprehensive plant & equipment policies and motor vehicle insurance as well. We provide a holistic approach to your business needs.
Contact us today to discuss this further.
Your Frequent Dry Hire Questions Answered
Having a dry hire agreement is a crucial step to protect your machinery from loss or damage from your customers whilst out on hire. Your insurance is also void without a signed and completed dry hire agreement.
Our suggestion is that you contact a legal firm to assist you in creating a tailored dry hire agreement for your business.
In a dry hire agreement, you typically find details such as the
• Hire period/dates,
• Hire fees,
• Terms of payment
• Responsibilities of both the hiring party and the owner
• Insurance details
Depending on the items that are for hire, these can vary greatly and we always suggest contacting a solicitor for legal advice. As tempting as it may be to download free dry hire agreement templates online, this could expose you and your business.
An important consideration under your insurance that will need to be expressed clearly in your drafted dry hire agreement is that your insurance company will seek recourse/subrogation from your customers/hirers of your equipment for any damage done to your equipment whilst out on hire in which you make an insurance claim for. In short, subrogation is your insurers right to recover any amounts they’ve paid out for a claim from a third party who may be responsible for causing the loss or damage.
If you wish to have this clause removed where the insurance company does not follow through with collection action against your clients, you can opt to have them insured under your policy in which is called a “damage waiver extension”. This is usually more costly for you, and also could mean rising insurance premiums each year for you as it allows your insurer to recoup the funds.
- Ensure that your hirer is qualified to use the equipment
- Ensure that an overview of the safety features and handling of the equipment is done prior to
- A dry hire agreement must be in forceHave your dry hire agreement drafted or reviewed by a solicitor
- Public Liability Insurance for both you and your hirer is crucial to protect both parties
- Making sure that your insurance policy does not have any sneaky clauses that could result in any unexpected financial losses to your business
Monthly Instalments is available for your dry hire equipment insurance
Flood is covered standardly. However, if you’re in a flood prone area, additional excesses could be imposed.
Yes, wet hire can be added to your cover.
Yes, own use of equipment can be covered.
It is important to note all of your acccessories and attachments on your insurance policy to ensure that in the event of damage, that they are covered. Even if they are inclued in the total purchase amount when you bought your equipment, it’s still best practice to itemise these.
If you have a registered trailer that you are using as part of your business, it is important to note that most motor vehicle insurance policies do not extend to cover liability from damages caused by the trailer. Meaning that because this item is road registered, it will need to be treated as it’s own individual item and will need to be insured. This can be included on your dry hire insurance policy.
What is dry hire insurance?
Dry hire insurance protects businesses that rent out equipment without providing an operator. In a dry hire arrangement, the equipment is handed over to the customer to use themselves — meaning the hire company has no control over how it is operated, and the hirer takes on full responsibility for the machine during the hire period.
This creates a unique risk profile. Accidental damage, theft, fire, and third-party liability can all occur when your equipment is in someone else's hands. A standard business insurance policy is rarely structured to respond to these scenarios correctly, dry hire insurance is specifically built around the risks of equipment hire operations.
A comprehensive dry hire insurance policy typically combines plant and equipment insurance to protect the machinery itself with public liability insurance to cover third-party injury and property damage claims that arise during the hire period.
How a dry hire insurance broker can help your business
Dry hire insurance is not a product you buy off the shelf — it needs to be structured around your equipment, your hire agreements, and how your clients use your machinery. A broker who understands the dry hire market accesses specialist insurers, reviews policy wordings in detail, and makes sure your cover responds when a claim happens — not just when you sign up.
At Morgan Insurance Brokers, we work with dry hire operators across Australia to structure policies that cover the right things. We check that your public liability policy extends correctly to hired equipment in the hands of a third party, that your plant and equipment cover includes the damage waiver extension to protect clients from subrogation, and that your sums insured reflect current replacement values — not what you paid for the machine three years ago.
We also review your hire agreements. What your contract says about who is responsible for damage directly affects how a claim is handled — and we identify clauses that could create gaps in your cover before a claim exposes them.
