Platform Decommissioning: Equipment Insurance Needs

Why equipment risk spikes during decommissioning

Platform decommissioning (offshore oil & gas, marine structures, and associated topsides/subsea assets) is a different beast to routine maintenance. The work is time-critical, weather-dependent, and involves heavy lifts, cutting, dismantling, lifting appliances, temporary works, and complex logistics.

That combination creates a perfect storm for equipment losses:

• High-value plant working at the edge of its envelope (heavy lift cranes, winches, strand jacks, SPMTs, ROV systems)

• Harsh environments (saltwater corrosion, wind, spray, vibration, contamination)

• Non-standard operations (hot cutting, subsea intervention, reverse engineering)

• Multiple parties and interfaces (operator, principal contractor, marine warranty surveyor, lifting contractor, logistics, waste handlers)

If you’re quoting or planning a decommissioning project, equipment insurance shouldn’t be an afterthought. It should be built into the risk plan from day one.

What counts as “equipment” in a decommissioning context?

When people hear “equipment insurance”, they often think of hand tools and excavators. In decommissioning, the definition is much broader and can include:

• Heavy lifting and handling: cranes, lifting beams, spreader bars, shackles, slings, chain blocks, hoists

• Specialist decommissioning kit: cutting systems, abrasive water jetting, diamond wire saws, cold cutting equipment

• Subsea and survey equipment: ROVs, AUVs, sonar, positioning systems, umbilicals, subsea tooling

• Power and control: generators, hydraulic power packs, control panels, PLCs, temporary electrical distribution

• Temporary works and access: scaffolding, work platforms, temporary stair towers, lighting towers

• Environmental and safety systems: containment booms, filtration systems, gas detection, breathing apparatus

• Transport and logistics assets: skids, frames, containers, toolboxes, lifting points, bespoke cradles

The insurance challenge is that many of these items are owned, leased, hired-in, or provided by subcontractors—and the contract may still make you responsible if they’re damaged.

The core cover: Contractors’ Plant & Equipment (CPE)

For most contractors, the starting point is Contractors’ Plant & Equipment insurance (also called plant all risks). It typically covers sudden and unforeseen physical loss or damage to insured plant and machinery.

What CPE can cover

Depending on the policy wording and schedule, CPE may cover:

• Owned plant and machinery

• Hired-in plant (if added)

• Tools and portable equipment

• Equipment in transit (if included)

• Equipment on site, at depots, or temporarily stored

Common decommissioning pitfalls with CPE

Decommissioning exposes the gaps in “standard” plant policies. Watch for:

• Offshore limits: some policies restrict offshore work or require specific declaration

• Territorial limits: UK-only vs worldwide, and whether transit is included

• High single-item values: strand jacks, ROVs, and cutting systems can exceed default limits

• Wear and tear exclusions: corrosion, gradual deterioration, and latent defects are common issues

• Operator error and incorrect use: some wordings are stricter than you’d expect

• Theft conditions: storage and security requirements can be hard to meet at remote ports

If your project includes mobilisation to ports, quaysides, barges, and offshore locations, you’ll want the policy to reflect that reality.

Hired-in plant: who is responsible when it breaks?

Decommissioning often relies on hired equipment—cranes, generators, compressors, cutting systems, and specialist tooling.

Contracts frequently make the hiring party responsible for:

• Loss or damage from the moment of collection

• Damage during use (including operator error)

• Theft from site or storage

• Continuing hire charges while equipment is repaired

A strong hired-in plant extension can be the difference between a manageable claim and a six-figure dispute.

Equipment in transit: the overlooked exposure

Decommissioning is logistics-heavy. Equipment moves between:

• Your depot and a staging yard

• Port facilities and quayside laydown areas

• Vessels, barges, and offshore installations

• Waste processing sites and recycling facilities

Transit losses can happen through:

• Loading/unloading incidents

• Dropped loads

• Road traffic accidents

• Sea water ingress

• Poor lashing and securing

You may need a combination of:

• CPE with transit cover

• Marine cargo / goods in transit (especially for sea legs)

• Project cargo cover for large, bespoke moves

The key is ensuring there’s no “grey zone” where each insurer assumes the other is picking it up.

Lifting gear and LOLER: insurance is not a substitute for compliance

Lifting operations are central to decommissioning, and failures can be catastrophic.

In the UK, lifting equipment is governed by LOLER (Lifting Operations and Lifting Equipment Regulations). Insurers will expect:

• Current thorough examination certificates

• Documented lifting plans and competent appointed persons

• Clear inspection regimes for slings, shackles, and accessories

• Traceability for lifting gear

Insurance can respond to accidental damage, but it won’t fix a compliance failure. Poor documentation can also make claims slower and more contentious.

Hot works, cutting, and specialist tooling

Cutting and dismantling introduces unique equipment risks:

• Heat damage to nearby plant

• Fire and explosion exposure

• Tooling failure under load

• Damage from debris and falling sections

• Contamination of hydraulics and control systems

If you’re using cold cutting, abrasive water jetting, or diamond wire saws, make sure the policy schedule correctly describes the equipment and values. Misdescription is a classic claims headache.

Subsea equipment: ROVs, umbilicals, and “mysterious disappearance”

Subsea kit is expensive and fragile—and losses aren’t always dramatic. Umbilicals can be damaged internally, connectors can fail, and equipment can be lost during recovery.

Insurers will look closely at:

• Maintenance logs and pre/post-dive checks

• Operator competence and procedures

• Whether the equipment is insured “all risks” including subsea operations

• Any depth limits or operational restrictions

If you rely on subcontractor ROV services, confirm whether your contract makes you responsible for damage and whether their insurance is primary.

Business interruption and delay: what happens when critical kit is out of action?

Even if you can repair or replace equipment, downtime can be the real cost.

Consider:

• Additional hire charges while waiting for replacement equipment

• Expediting costs (air freight, urgent fabrication)

• Liquidated damages for delay

• Standby costs for vessels and crews

Some policies can include extensions for:

• Hire charges (continuing hire)

• Increased cost of working

• Tools replacement on a new-for-old basis (where available)

For larger projects, these exposures are often managed through project insurance structures rather than a simple annual plant policy.

Contractual risk: who owns the loss?

Insurance should mirror the contract. Key clauses to review include:

• Responsibility for hired-in plant and third-party equipment

• Indemnities for damage to property in your care, custody, or control

• Waivers of subrogation (common in energy contracts)

• Cross-liability and additional insured requirements

• Insurance limits, deductibles, and evidence requirements

A frequent issue is assuming “the operator’s project policy will cover it.” Sometimes it will, sometimes it won’t—and often it will only cover certain parties or certain assets.

Typical exclusions to plan around

Every policy is different, but these exclusions often matter in decommissioning:

• Gradual deterioration, corrosion, and wear and tear

• Mechanical or electrical breakdown (unless specifically included)

• Defective design or workmanship

• Consequential loss (unless extended)

• Unexplained loss / inventory shortages

• Damage during testing or commissioning (wording dependent)

• Pollution and contamination (usually separate)

The practical takeaway: don’t just ask “do we have plant cover?” Ask “does it cover this operation, in this location, with this kit, under this contract?”

What to prepare before you approach a broker/insurer

The fastest way to get sensible terms is to present the risk clearly. Prepare:

• Equipment schedule with make/model/serial numbers and replacement values

• Single item max value and total sum insured

• Locations: depot, port, offshore, international legs

• Nature of operations: cutting, lifting, subsea, heavy transport

• Security arrangements at laydown areas

• Maintenance and inspection regimes (LOLER, PUWER)

• Claims history (if any)

• Contract requirements and insurance clauses

The clearer the picture, the fewer assumptions an underwriter will make—and assumptions are where exclusions and disputes are born.

A practical equipment insurance checklist for decommissioning

Use this as a quick internal sense-check:

• Do we have CPE/plant all risks that explicitly allows offshore and port work?

• Are hired-in plant and continuing hire charges covered?

• Is equipment in transit covered for road and sea legs?

• Are high-value single items correctly declared and valued?

• Are ROV/subsea operations included with no hidden depth restrictions?

• Do we have clear security conditions we can actually comply with?

• Are LOLER inspections current and traceable for lifting accessories?

• Do contract clauses create responsibility for third-party equipment?

• Are deductibles realistic for the project’s cashflow?

Final thoughts: insure the kit, but manage the interfaces

Platform decommissioning losses rarely come from a single failure. They come from interfaces: handovers, lifts, transport legs, weather windows, and subcontractor boundaries.

The best equipment insurance programme is one that’s aligned to the project plan and contract structure—and backed by strong operational controls.

If you’d like, share the rough scope (offshore/nearshore, key equipment types, and whether kit is owned or hired) and I’ll help you outline the ideal insurance structure and the key questions to ask before you bind cover.

Call to action: Need UK equipment insurance for decommissioning work? Speak to a specialist broker who understands offshore, heavy lift, and complex contractor risk—so your cover matches your contract and your operations.