If you’re a small business owner in the construction industry, you probably don’t need us to tell you how important your plant and equipment are to your bottom line.
Machinery such as excavators, tractors, loaders and generators are also often the most valuable assets a business owns. To buy, an excavator can cost upwards of $30,000,1 skid steer loaders can cost upwards of $30,000,2 and tractors can start at around $25,000.3
On top of that, these kinds of assets can also be some of the easiest to misunderstand when it comes to small business insurance. That’s because mobile plant and equipment don’t always fit neatly into traditional insurance categories. A machine might spend time in your yard, on a customer’s site, being transported between jobs or hired to someone else entirely. And finding out your excavator was only insured while parked inside your yard – after being damaged on a job site – could be a significant blow for your business.
To avoid that kind of financial shock, you may wish to consider plant and equipment insurance to cover your essential high-value assets. Adding them to a broader small business insurance policy can be a practical way to avoid fronting major costs if a vital piece of machinery is suddenly put out of action.
In this article, we’ll break down what plant and equipment insurance actually is, what it covers, and the kinds of plant and equipment covered, so you can feel more confident in deciding if you need this kind of insurance for your business.
What is plant and equipment insurance?
Mobile plant and equipment insurance covers accidental loss, damage or theft to machinery, tools or equipment that are vital to your business activities.4,5
Mobile plant and equipment insurance isn’t necessarily a standalone type of insurance policy – so, for example, you may not find standalone excavator insurance or tractor insurance. For some insurers, it will be an additional cover that can be added to a small business insurance policy.
At Youi, you can cover some types of mobile plant and equipment under our optional business cover – Business Items6 which can be added to an eligible Small Business Insurance policy at an extra cost.
Which machinery is covered under plant and equipment insurance?
Each policy is different, so what one insurer covers for equipment insurance, another may not.7,8
Mobile plant that may be covered includes forklifts, earthmoving equipment such as excavators, loaders and backhoes, or civil equipment such as scrapers and graders.9
For most insurers, not every single type of plant, machinery or equipment will be covered under a policy and some insurers will have different definitions of what plant, machinery or equipment are. For example, at Youi, we classify a business item as any portable items or mobile equipment you use in your trade or profession, that either belong to you or you’re responsible for, and are used in the course of your business either at or away from the business premises. These can include non-standard vehicles.
Standard vs non-standard vehicles
A standard vehicle is typically characterised by road-going features such as directional indicators, brake lights, rear vision mirrors, the means to mount a registration plate, and a fully enclosed cabin with doors and seatbelts.10
A non-standard vehicle is a vehicle that does not meet standard, road-going features which might include a tracked vehicle – such as an excavator or bulldozer – or an agricultural machine.10
Under a Youi small Business Insurance policy, a non-standard vehicle is defined as one that is not primarily designed for on-road use, and does not comply with the standard regulations for unconditional registration for road use, which could include:11
- Ride-on lawnmowers
- Mini bobcats
- Cleaning machines
- Diggers or excavators.11
Are my plant and machinery already covered?
When you buy a new or second hand piece of plant or equipment, there may be a misconception that it’s already insured or that existing insurance you have may cover it. Small business insurance, like any other cover, has exclusions and limitations depending on the policy.7
Is my machinery covered by the leasing company?
Many people may choose to lease or finance equipment and machinery as opposed to buying it outright. Leasing may mean you’re paying a lower upfront cost; the asset may not depreciate as quickly, which makes cash flow easier to manage; and your lease might cover some of the repairs.12
This doesn’t automatically mean the leasing company provides machinery insurance cover, as many leases put the risk on the lessee.13 This is where Guaranteed Asset Protection (GAP) insurance may be useful, so if your machinery is written off in an insured event, you’re not left out of pocket and owing the leasing company.
GAP insurance can cover the remaining loan repayments on an asset if the vehicle or machinery is written off before you’ve finished repaying it.12 GAP insurance may be an add-on or optional cover for general vehicle or machinery insurance.14
My machinery is registered, so is it covered?
This will depend on the type of business machinery or equipment you have that needs to be registered. If you’re registering a work car, it will be covered by Compulsory Third Party (CTP) insurance.
CTP is mandatory insurance all registered vehicles must have, and it covers your legal liability if someone is injured or killed in an accident; however, it doesn’t cover damage to your vehicle.15,16
For larger machinery such as loaders, cranes and dozers, they may require conditional registration if they don’t comply with standard regulation but have a need for limited road access.17 Conditional registration also includes CTP for your machinery;18,19 however, it may be best to check your state’s registration regulations.
Does my contents insurance cover my machinery and equipment?
If you store your business items, equipment or machinery in your shed at home for example, your home contents insurance may not cover it.20
In some cases, an insurer may have an optional cover for business items you might store at home. At Youi, you can add Business Items optional cover to an eligible Home Contents Insurance policy, so they’re covered for any accidental loss or damage as part of an insured event, and the most we will pay is up to $5,000 after excess.21
“While it might seem like common sense that your business equipment or machinery is automatically covered by your home contents insurance policy. This isn’t always the case,” says Mervyn Hartley, Youi’s Head of Product – Home and Small Business.
“By not understanding what is and isn’t covered you run the risk of being out of pocket to fix or replace damaged items that aren’t included in your cover if you need to make a claim.”
What does mobile plant and equipment insurance cover?
Mobile plant and equipment insurance may cover different events depending on the insurer but speaking generally, they cover items if they’re damaged by natural hazards22 – such as a storm, flood or bushfire – or if they’re stolen or destroyed.5
An example may be if you have an excavator sitting on an exposed site, and a storm comes through causing damage to the cabin glass, or you’re reversing a loader out of a site, and you clip a parked car damaging their paint work. The events specifically covered by your policy will be listed in the Product Disclosure Statement (PDS) and further detail in your policy schedule.
Insurers will typically note the insured value of your business equipment on your policy schedule. The value of your assets may go down over time, so keeping your policy up to date can help you keep the right level of cover.23
“Keeping your insurer in the loop about your business items can help avoid underinsurance,” says Hartley.
“Accounting for new items in your asset inventory and informing your insurer can help ensure you maintain the right cover for your business needs.”
Plant and machinery insurance vs business contents insurance
While plant and machinery insurance and business contents insurance can both help protect your business assets against loss, damage or theft, they're generally designed for different types of property.
Business contents insurance typically covers items kept at your business premises, such as office furniture, computers, stock and other business equipment.24
Plant and machinery insurance is generally designed to cover mobile machinery and equipment such as excavators, loaders, tractors and forklifts against accidental loss, damage or theft.4,5
The main difference is where and how the equipment is used. If your equipment is kept at your business premises, business contents insurance may be suitable. If your machinery is used at worksites or moved between locations, mobile plant and machinery cover may be more appropriate.
Depending on your business operations, you may choose one type of cover or both.
As cover, limits and exclusions vary between insurers, it's important to read the PDS and policy wording carefully to understand what is and isn't covered.
What else is included in mobile plant and equipment insurance?
Depending on the insurer and policy, mobile plant and equipment insurance may also provide cover for other portable items used in your business, such as tools or electronic equipment.4
In some cases, these items may be covered under the same policy. In others, you may need separate cover, such as portable equipment insurance or tools insurance, if these products are offered separately.
Definitions and cover can vary between insurers. For example, the way an insurer classifies plant, equipment, tools and other business items may differ, as can the limits, exclusions and optional covers available. Reading the PDS and policy wording carefully can help you understand exactly what's covered.
What should I check in my policy wording?
As with any insurance policy, there are plenty of terms that get thrown around that can become confusing. Some important terms to consider for a small business insurance policy and any optional covers may be:
- Tax audit – covers professional fees associated with an audit of your business being carried out by a governing body such as the ATO.25
- Business interruption – Covers your ongoing business costs if your business operations are temporarily disrupted due to an event such as fire damage to your property.4
- Public liability – Covers your legal liability if someone is injured or has their property damaged because of you or your business's negligence. For some industries this may be mandatory, so it can be good practice to see if you need public liability cover by law.4
- Excess – Your excess is the amount you have to pay towards a claim. Insurance policies have different excesses that apply to different situations.26
Whether you’re adding mobile plant to your business inventory, renewing your cover or starting a new business venture, hopefully you’ll now have a better understanding of insurance for mobile plant and equipment and whether or not it suits your business.
If you want to explore cover with Youi and see if we’re the right fit for you, consider starting a quote online or give our specialist advisors a call to discuss cover options on 1300 010 648.
1Source: Industry Search – Excavator Prices and Buying Guide, March 2025
2Source: Industry Search – Find the right skid steer loader, n.d.
3Source: Industry Search – Australian Farm Tractor Prices & Buying Guide, April 2025
4Source: Australian Government Business – Types of business insurance, n.d.
5Source: Business Victoria – Find the right insurance, October 2022
6Business Items cover is optional and an additional cost applies. Conditions, limits and exclusions apply. The most we will pay for each item is $2,500 unless you have selected a specific amount and that amount is shown on your policy schedule under High Value Business Items, in which case the most we will pay for that item is the amount shown on your policy schedule.
7Source: Financial Rights Legal Centre – Understanding your Insurance Policy, January 2023
8Source: Moneysmart – How insurance works, n.d.
9Source: Master Builders Queensland – Mobile plant, n.d.
10Source: Australian Government – Road Vehicle Standards, December 2025
11For full details, see the PDS & Policy Wording.
12Source: Australian Government Business – Leasing or buying vehicles and equipment, n.d.
13Source: Sprint Law – Equipment Leasing in Australia: Key Legal Considerations, February 2026
14Source: Moneysmart – Add-on car insurance, n.d.
15Source: Moneysmart – Choosing car insurance, n.d.
16Source: Motor Accident Insurance Commission – About CTP insurance, November 2024
17Source: Qld Government – Construction vehicles, March 2021
18Source: NSW Government – Apply for conditional vehicle registration, n.d.
19Source: Qld Government – Conditional registration explained, February 2026
20Source: Australian Government Business – Home-based businesses, n.d.
21Additional costs, limits and exclusions apply. For full details, see the PDS.
22Source: Constructionsales – Heavy machinery insurance guide: What you need to know about insuring your equipment, May 2026
23Source: Australian Government Business – Manage your business insurance, n.d.
24Source: Finder – Business contents insurance, April 2026
25Source: Future Advisory – Tax Audit Insurance: What It Is, Costs & Is It Worth It, April 2026
26Source: Insurance Council of Australia – What is an excess and when do I need to pay it?, n.d.
