A business's equipment keeps getting smarter and more mobile: a drone photographs from above a roof, a lift works on a façade, a forklift moves around a warehouse. Every one of these can cause damage too – and classifying equipment damage for insurance purposes is one of the areas that raises the most questions in practice. This article brings order to it: which piece of equipment damage belongs to which cover.
- Damage caused by a piece of work equipment while it's carrying out work typically belongs to public liability cover.
- Damage caused by machinery while travelling on public roads belongs to the world of MTPL – the boundary depends on the function.
- Drones are subject to their own separate rules – cover needs to be matched to how they're actually used.
The basic situation: equipment at work
If the damage is caused by equipment while it's carrying out work – sparks from an angle grinder, a dropped drill, a façade damaged by a scissor lift – that's the world of public liability insurance: the equipment is an extension of the work. The question here isn't the equipment itself, but the usual trio: is the activity included in the policy, does the limit reach far enough, and what do the exclusions say (see the exclusions map). For certain high-value or specialised machines, the policy terms may set separate rules – this can be clarified when requesting a quote, by describing your equipment fleet.
The MTPL boundary: when the machine is also a vehicle
Equipment with a double life – a crane, an excavator, a forklift, a cherry picker – behaves as a vehicle on the road and as a tool while working. The insurance consequence: damage from road use falls under MTPL (and the world of fleet cover – see kotelezo.biz), while damage caused while working falls under liability cover. A separate boundary article covers the details: liability insurance and MTPL – for an equipment-heavy business, this is required reading.
Drones: new equipment, its own rulebook
Operating a drone is subject to a statutory mandatory liability insurance requirement (Government Decree 39/2001 (III. 5.), Section 2/A, with minimum insured sums set by weight category, starting from a take-off mass of 250 grams) – a general business liability policy typically does not substitute for this on its own. Two practical lessons: operating within the rules is the basis for insurability (flying without the required authorisation puts your cover at risk too – see gross negligence); and cover needs to be sized to how the drone is actually used – hobby flying and commercial service are two different risk levels.
What an equipment-heavy business should do
List your equipment fleet in three columns: what travels on public roads (an MTPL question), what carries out work (a liability question), and what does both (needs matching up). When requesting a quote, this list is worth its weight in gold: it lets the covers be fitted together without gaps or overlap (see the activity assessment, the data checklist). To review the fit: a free consultation.
Example: the drone photographer's case
A photographer uses a drone for property photography. During an aerial shoot, a control fault sends the drone drifting over the neighbouring plot, where it collides with a parked car. The sequence of questions shows the logic of equipment damage clearly: was the flight compliant (registration, authorisation, airspace use – under the applicable rules); is the activity – commercial drone use – included in the cover; and is there a cover element that extends to drone damage, whether as part of the policy or as separate drone liability insurance. If all three are in order: a claim, handled through the normal process. If compliance is missing: cover is at risk too (unauthorised activity is the risky band). So new equipment isn't just a new opportunity – it's a new insurance line item too, worth sorting out at the same time as you acquire the equipment.
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