As Australia’s mobile plant and equipment sector grows in response to demand across construction, infrastructure, and mining industries, businesses are turning to flexible equipment hire solutions to keep projects moving.
Recent forecasts show the construction machinery market is on track for expansion, with analysts projecting annual growth of about four to five per cent through to 2030, driven by road, rail, energy, and resource developments (source: Australia Construction Machinery Market Report 2025-2034).
This growth creates opportunities on both sides of the hire market: for operators looking to manage rising business costs and for owners seeking to maximise the return on their investment by hiring out their fleet.
It’s important to be reminded of the key considerations when hiring out mobile plant and equipment (MPE). NTI’s National Product Manager for Mobile Plant, David Kidd, explains why it’s critical to understand what you’re entering into when it comes to hire arrangements and insurance.
Seek quality legal advice
Hire agreements are central to any hire business and a critical risk management tool. Engage a lawyer experienced in preparing hire agreements for the mobile plant industry to draft an agreement tailored to you.
The one-off expense is negligible compared to the risk exposure from a contract that’s poorly worded or doesn’t cover the relevant risks and conditions.
David said this was one area where shortcuts shouldn’t be taken.
“Hire agreements are civil agreements. A high-quality hire agreement can provide years of contract certainty and clarity,” he said.
“A poorly-worded one can lead to complications like obtaining adequate insurance, conflicts around who is responsible for damage, accusations of unfair contract terms, and delayed or declined insurance claims.”
Crafting the agreement
Preparing your hire agreement with transparent terms and conditions is a critical step to work through with your lawyer.
“There is a lot to consider, and obtaining legal expertise to craft a hire agreement can serve the business and customers well into the future,” David said.
“Delivering a positive customer experience can protect your reputation and boost your brand, leading to repeat business and referrals. Clarity of obligations can protect both owner and hirer.”
Damage waivers
Damage waivers are not insurance policies: they are conditions or clauses in a hire agreement that — when included or purchased as an option — will often remove the hirer company’s rights of subrogation for recoveries or costs if the item has succumbed to an unforeseen event while on hire.
“Poorly constructed damage waivers have the potential for disputes and other difficulties,” David said.
“Communication and clarity on what the damage waiver does and doesn’t cover is critical, so the hirer can identify and make suitable arrangements to deal with any gaps, including opting out of the damage waiver and insuring themselves if they prefer under standard dry hire conditions.”
Alternatively, equipment can be comprehensively insured while in the hirer’s possession and use.
“You can attach conditions, such as hirer responsible for an elevated level of excess to force their skin in the game, and other appropriate and reasonable terms to ensure accountability,” David said.
“This is where legal advice is recommended, to ensure that your hire agreement and conditions of hire are clear and not subject to any ambiguity.”
Speak to your insurance broker
David said a sound hire agreement clearly describes the insurance you’re providing and the risks the hirer must manage or cover.
“I recommend working with your broker and making the most of their experience and expertise,” he said.
“Experienced brokers are experts in their field, so be guided by them.
“Their input on how insurance arrangements comply with hire agreement requirements is invaluable. The goal is to avoid uninsured losses for you or your customer, ensure the customer understands their liabilities, and that they have a positive experience.”
It’s important to ensure that your insurer is legally entitled to manage any insurance claims per the hire agreements’ terms, conditions, exclusions, and limitations, including pursuing recoveries (legal action) directly from the hirer (your customer).
Hiring out your MPE can be a great way to generate revenue from all your assets. If you’re thinking of hiring out some of your MPE, it’s important to obtain the right expert advice and insurance. Speak to your lawyer and insurance broker.
National Transport Insurance is an equal joint venture administered on behalf of the insurers CGU Australia Pty Ltd trading as CGU Insurance ABN 62 004 478 960 AFSL 700014 and AAI Limited Trading as Vero Insurance ABN 48 005 297 807 AFSL 230859 by its manager NTI Limited ABN 84 000 746 109 AFSL 237246. This article contains general information only and you should obtain your own professional advice based on your personal and business circumstances. NTI bears no responsibility, and shall not be held liable, for any loss, damage or injury arising directly or indirectly from your use of or reliance on the information in this article.
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