In construction and engineering, plant is profit. When a key excavator, telehandler, compressor, generator, crane, or specialist piece of engineering equipment fails unexpectedly, the cost isn’t just the repair bill—it’s the downtime, the missed programme dates, the knock-on delays for subcontractors, and the reputational damage with clients.
Most businesses understand the basics of plant insurance for theft and accidental damage. But mechanical and electrical failure is a different risk. A machine can be well maintained, used correctly, and still suffer a sudden breakdown: a hydraulic pump fails, an alternator burns out, a gearbox strips, or an electronic control module dies. That’s where plant breakdown insurance (often called mechanical breakdown cover or engineering breakdown) comes in.
This guide explains how plant breakdown insurance works for UK construction and engineering businesses, what it typically covers, common exclusions, how claims are assessed, and how to choose the right level of protection.
Plant breakdown insurance is designed to cover sudden and unforeseen mechanical or electrical failure of insured plant and machinery. It is usually arranged as part of:
A Contractors’ Plant policy with an optional “mechanical breakdown” extension
An Engineering Inspection / Engineering Breakdown policy (often used for fixed plant, lifting equipment, pressure plant, and specialist engineering machinery)
A combined package for construction businesses that includes plant, liability, and contract works
The key difference versus standard plant damage cover is the cause of loss. Standard cover often responds to external events (impact, overturning, fire, theft, vandalism). Plant breakdown cover focuses on internal failure—the machine breaks due to a mechanical or electrical fault.
Plant breakdown cover is most relevant if you:
Own high-value plant (excavators, dumpers, rollers, cranes, MEWPs, telehandlers)
Rely on specialist engineering equipment (welding sets, compressors, pumps, generators, CNC or fabrication equipment)
Operate in remote locations where breakdown recovery is expensive
Run tight programmes where downtime creates contractual penalties
Hire in plant but remain responsible for damage under the hire agreement
It’s also valuable for businesses that are scaling up and have moved from “one machine” to a fleet—because a single breakdown can disrupt multiple jobs.
Cover varies by insurer, but plant breakdown insurance commonly includes:
If a covered mechanical or electrical breakdown occurs, the policy may pay the cost to:
Repair the damaged component(s)
Replace parts that have failed
Rebuild the affected assembly (e.g., engine, gearbox, hydraulic system)
Settlement is usually based on the insurer’s definition of indemnity (repair cost, replacement, or market value). Some policies apply betterment adjustments if new parts significantly improve the condition compared to pre-loss.
This is the heart of the cover. Examples can include:
Engine seizure due to sudden lubrication failure
Hydraulic pump failure
Gearbox or final drive failure
Electrical short circuit causing damage to wiring and control units
Failure of alternators, starters, or electronic control modules
On modern plant, electronics are often the most expensive and disruptive failures. Depending on the wording, breakdown cover may respond to:
Short circuits
Arcing
Burn-out of motors
Failure of inverters, control boards, sensors, and ECUs
Some wordings cover the damage caused by the breakdown event, not just the failed part. For example, a failed bearing leads to catastrophic engine damage. Whether that wider damage is covered depends on the policy definition of breakdown and exclusions.
Some policies can be extended to include:
Overtime and express freight to speed up repairs
Temporary hire costs for replacement plant
Recovery and towing (often under plant damage, but sometimes linked)
If downtime is a major risk for you, it’s worth asking specifically about these extensions.
Mechanical breakdown cover is not a “maintenance contract”. Insurers generally exclude predictable or gradual deterioration. Typical exclusions include:
Worn pins and bushes
Gradual hydraulic leakage
Corrosion, rust, scaling
Fatigue cracking over time
If a breakdown can be linked to missed servicing intervals, incorrect oils/filters, or ignored warning signs, insurers may decline the claim.
Tyres and tracks (unless damaged by an insured event)
Belts, hoses, filters
Lubricants and fluids
If the fault existed before the policy started or before the item was added to the schedule, it’s commonly excluded.
Damage caused by misuse, overloading, or incorrect operation may fall under accidental damage rather than breakdown. Some policies can be strict here, so it’s important to clarify how “breakdown” is defined.
If the plant is under warranty, insurers may expect you to pursue the warranty route first. That doesn’t mean insurance is pointless—warranty disputes and downtime can still be costly—but it affects how claims are handled.
A lot of claim disputes come down to one question: Did the plant fail internally, or was it damaged by an external event?
If an excavator overturns and the engine is damaged, that’s typically accidental damage.
If the engine seizes during normal operation with no external incident, that’s breakdown.
Some businesses assume “plant insurance is plant insurance.” In reality, the cause of loss determines whether the claim is covered and which section responds.
A good approach is to review your plant schedule and ask:
Do we have cover for theft and accidental damage?
Do we have cover for mechanical/electrical breakdown?
Are hired-in items treated differently from owned items?
Here are real-world style examples of how breakdown claims often arise.
A telehandler used daily on a housing site suffers sudden loss of drive. The gearbox has failed, requiring a rebuild.
Potential costs: gearbox rebuild, labour, recovery, downtime
Key questions: servicing records, oil analysis (if available), any warning lights or symptoms
A site generator experiences electrical failure and the alternator burns out.
Potential costs: alternator replacement, electrician labour, possible damage to control panel
Key questions: load management, maintenance, environmental conditions, evidence of sudden event
An excavator loses hydraulic pressure. A pump fails and contaminates the system.
Potential costs: pump replacement, flushing, filters, labour, potential damage to valves
Key questions: whether contamination is sudden, maintenance history, whether failure is wear-related
A fabrication or engineering business relies on a specialist machine where a control board fails, stopping production.
Potential costs: replacement board, diagnostics, shipping, downtime
Key questions: surge protection, electrical supply quality, evidence of sudden electrical event
Mechanical breakdown claims are more technical than theft or impact claims. Expect the insurer to look for:
Service and maintenance records (planned maintenance, inspections, repairs)
Hours of use and operating conditions
Operator statements and incident timeline
Diagnostic reports from engineers
Parts inspection (sometimes the insurer wants the failed parts retained)
The more organised your records, the smoother the claim process tends to be.
Not all breakdown cover is equal. When comparing options, focus on these areas.
Look for wording that clearly includes sudden and unforeseen mechanical and electrical failure. Ambiguous definitions can create claim friction.
Ask how the insurer treats:
New parts fitted to older machines
Reconditioned parts
Depreciation or betterment deductions
Make sure each item is insured for an appropriate value, especially high-ticket plant like cranes, large excavators, or specialist equipment.
Breakdown cover often has a different excess than accidental damage. If the excess is too high, smaller failures become self-insured.
If you hire in plant, check:
Whether breakdown cover applies to hired-in items
Whether the hire agreement makes you responsible for breakdown
Any conditions around maintenance while on hire
If you work across the UK, that’s usually straightforward. If you work offshore, on major infrastructure, or occasionally abroad, clarify the territory.
If downtime is your biggest pain, ask about:
Hire costs for temporary replacement plant
Overtime/express parts
Loss of hire (if you hire plant out)
Insurers love evidence of control. These steps can reduce breakdown frequency and strengthen claims.
Planned preventative maintenance (PPM): documented schedules, signed off
Daily/weekly checks: fluids, filters, visible leaks, warning lights
Operator training: correct warm-up/cool-down, load limits, safe operation
Telematics and diagnostics: fault codes, hours tracking, alerts
Oil sampling and condition monitoring: especially for high-value engines and gearboxes
Clean fuel management: water separation, tank hygiene, filter changes
Storage and security: reduces theft, but also protects from weather-related deterioration
Even simple measures—like keeping service logs in one place—can make a big difference.
Construction and engineering businesses often need a layered insurance approach. Plant breakdown is one piece of the puzzle alongside:
Contractors’ Plant insurance: theft, accidental damage, hired-in plant
Contract Works insurance: damage to works in progress and materials
Public Liability and Employers’ Liability: injury and property damage claims
Professional Indemnity (where relevant): design, specification, advice
Engineering inspection (statutory): lifting equipment and pressure systems inspections
Business interruption (for fixed premises): loss of income following insured events
If your business straddles construction and engineering—design/build, M&E, civil engineering, or specialist installation—your risk profile can be complex. The goal is to avoid gaps where a breakdown stops the job but the policy only covers external damage.
Often it isn’t. Many policies cover theft and accidental damage as standard, with mechanical/electrical breakdown as an optional extension.
Usually no. Wear and tear and gradual deterioration are common exclusions.
A hose is often treated as a consumable. If the hose fails due to wear, it may be excluded. If it’s damaged by an insured external event, it may be covered under accidental damage.
They can be, but you should confirm the wording includes electrical breakdown and electronic components.
Not always. Some policies offer this as an extension. If downtime is critical, ask for hire costs and additional expenses cover.
You may need specialist cover and statutory inspection arrangements. Many businesses combine contractors’ plant with engineering inspection for lifting equipment.
Transit risks are often covered under a plant policy, but breakdown itself typically relates to operation. Confirm cover during loading/unloading and movement between sites.
Typically: plant list, values, age, usage, security arrangements, hire exposure, claims history, and maintenance approach.
Sometimes, but it depends on the policy and your hire agreements. Clarify responsibilities and whether breakdown is your liability.
Keep service records, log hours, retain failed parts when safe, document the timeline, and get a clear engineer report.
Plant breakdown insurance is about keeping projects moving. For construction and engineering firms, a single mechanical failure can trigger a chain reaction of delays and costs. The right breakdown cover—paired with strong maintenance records and sensible risk management—can turn a major disruption into a manageable repair.
If you rely on plant to deliver contracts on time, it’s worth reviewing your current contractors’ plant and engineering insurance to confirm whether mechanical and electrical failure is included, what the exclusions look like, and whether you have options for hire costs and additional expenses.
Need a fast quote or advice? Speak to a specialist who understands construction and engineering risks, and make sure your plant schedule and breakdown exposure are properly reflected in your cover.
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