Dry Hire vs Wet Hire Insurance

What Dry Hire Insurance Typically Covers

Dry hire insurance isn't a single standalone policy, it's a combination of benefits within a mobile plant or machinery policy that need to be structured correctly for hire arrangements.

Depending on how your policy is set up, cover may extend to:

• Physical damage to your own machines while out on dry hire, including damage caused by the hirer or their operator
• Your liability to a machine owner if you've hired in plant and your operator damages it (hired-in plant cover)
• Legal costs associated with liability claims arising from hire arrangements
• On-hire situations where you've hired in a machine and on-hired it to another party on dry hire terms

Where a policy can include an owner's protection benefit, the key variable is which version it includes. The narrower version covers employee conduct only. The broader version extends to the hirer's conduct as well. That difference matters every time a machine goes out the gate.

A written hire agreement is commonly required as a condition of hired-in plant cover. Without one, some policy wordings won't respond to a claim, regardless of the circumstances.

This is general information only. Policy terms vary between insurers, talk to your broker about what applies to your specific situation.

What Affects the Premium for Dry Hire Plant Insurance

Several factors influence what you'll pay for a plant policy that properly covers dry hire arrangements.

• Machine type and value: Higher-value machines and specialised equipment typically attract higher premiums. The replacement cost of each machine is a primary rating factor.
• How frequently machines are hired out: A hire company with machines out on dry hire most of the year presents a different risk profile than a contractor who occasionally hires out a spare machine.
• The hirer's experience and qualifications: Some insurers consider whether hirers are required to demonstrate operator competency before taking possession of a machine.
• Whether a hired-in plant extension is included: Adding cover for machines you hire in from others affects the overall premium, as does the sum insured for that extension.
• Claims history: A history of plant damage claims, particularly those involving hired-out machines, will influence both the premium and the terms available.
• The quality of hire agreements: Insurers view formalised, written hire agreements as a risk management positive. Businesses with documented hire processes may find better terms available to them.

This is general information only. For a specific quote based on your fleet and hire arrangements, get in touch with our team.

The Difference Between Dry Hire and Wet Hire, and Why It Changes Everything

Most plant owners know roughly what their insurance covers. They've got a policy, the machines are listed, the premiums are paid. Job done.

Except it's not that simple.

When you hire out a machine without an operator, what the industry calls dry hire, you're handing control of an expensive, potentially dangerous piece of equipment to someone else entirely. And a surprising number of plant insurance policies aren't built for that scenario. Some will respond. Some won't. The difference often comes down to a single benefit in the policy wording that most owners have never read.

This page explains how dry hire and wet hire arrangements typically affect your insurance, what to look for in a policy, and what to do before you hand over the keys.

Dry Hire vs Wet Hire: The Definitions That Matter

The terms sound straightforward, but they carry real weight in insurance policy wordings.

Dry hire means the machine goes out without an operator. The hirer provides their own person to run it. You, as the owner, have no involvement in how the machine is operated once it leaves your yard.

Wet hire means the machine and an operator go together. Your employee is on site, running the machine, under your direction.

From an insurance perspective, these two arrangements create very different risk profiles. With wet hire, your operator is still your employee, you have some control over how the machine is used. With dry hire, you've handed that control to a third party. The insurer sees that differently, and the policy wording often reflects it.

Why the Distinction Shows Up in Policy Wordings

Mobile plant policies can include what's commonly called an owner's protection benefit. The purpose is to protect the machine owner when damage is caused by someone else's conduct, typically an employee's mistake. That benefit can be structured in two ways.

The narrower version applies only when the machine is being operated by your own employees. If the machine is out on dry hire at the time of the damage, that benefit doesn't apply. The hirer's conduct isn't covered under that version.

The broader version extends the same protection to machines on both dry hire and wet hire. If the hirer or their operator causes the damage, the benefit can still respond, subject to the usual conditions.

Both versions typically exclude the machine owner's own conduct. The protection is specifically for situations where someone else's actions caused the loss. That's an important distinction.

So what version does your policy have? That's the question worth asking.

The Hired-In Plant Problem

Dry hire risk doesn't only sit with the machine owner. Contractors who hire in plant from other companies face their own exposure.

Say you're running a civil project and you've hired in an excavator on dry hire terms. Your operator damages it. The machine owner's insurer comes after you for the cost of repairs or replacement. Do you have cover for that liability?

Some plant policies include a hired-in plant extension that covers exactly this scenario, your liability to the machine owner for damage that occurs while the machine is in your possession. But that extension typically comes with conditions. A formal written hire agreement, signed by both parties before the loss, is commonly required. Without one, the claim may not be considered at all.

This is one of those areas where the paperwork matters as much as the insurance. If you're regularly hiring in plant from other parties, make sure the hire agreement is in writing, signed, and in place before the machine arrives on site. And check whether your policy actually includes hired-in plant cover, it's not always standard.

For contractors who both own machines and hire them in from others, the picture gets more complex. You may need to think about machinery insurance in NZ for your own fleet, as well as the hired-in plant exposure on top.

What a Written Hire Agreement Actually Does

A written hire agreement isn't just a formality. In the context of insurance, it does several things.

First, it establishes who was responsible for the machine at the time of the loss. That matters when an insurer is assessing a claim or deciding whether to pursue recovery from the hirer.

Second, some policy wordings specifically require a formal written agreement as a condition of cover for hired-in plant claims. No agreement, no cover, regardless of what else the policy says.

Third, it creates a clear record of the hire terms, including who was responsible for insuring the machine during the hire period. That's relevant if there's a dispute about liability after a loss.

If you're a hire company, your standard hire agreement should address insurance obligations clearly. If you're a contractor hiring in plant, read the agreement before you sign it. Some hire companies require the hirer to insure the machine for its full value during the hire period. Others retain their own insurance and charge accordingly. Knowing which applies to you affects what cover you need.

Cross-Hire: When Contractors Hire to Each Other

Cross-hire, where one contractor hires a machine to another, is common in the New Zealand construction and civil sectors. It's practical, it's efficient, and it creates insurance gaps that neither party has thought about.

The machine owner's policy may not extend to dry hire situations without the right benefit in place. The hiring contractor's policy may not include hired-in plant cover, or may only cover it up to a limited sum insured. And if the machine is damaged, both parties can end up pointing at each other while the repair bill sits unpaid.

This is exactly the kind of scenario where having a broker review both policies, before the hire arrangement starts, is worth the time. It's not about finding the cheapest option. It's about making sure the cover actually works when something goes wrong.

For specific machine types, the considerations can vary. Hired-in plant insurance covers the liability side for contractors. If you're operating larger equipment like cranes, the stakes, and the policy requirements, are higher again.

What to Check in Your Policy Before You Hire Out

If you own plant and hire it out on dry hire terms, here's a practical checklist of things to confirm with your broker before the next hire goes out.

Policy cover checklist for dry hire:

• Does your policy include an owner's protection benefit, and does it extend to dry hire arrangements?
• If the benefit only covers wet hire or employee-operated machines, is there an option to upgrade to the broader version?
• Does your policy include any liability cover for damage caused by the hirer, or is that excluded entirely?
• Is there a hired-in plant extension if you also hire in machines from others?
• Does your policy require a formal written hire agreement as a condition of that extension?
• Are all the machines you hire out listed on your policy at their correct replacement values?
• Does your policy respond if the hirer on-hires the machine to a third party?

None of these questions have universal answers. Policy wordings vary between insurers, and the same insurer may offer different versions of the same benefit depending on how the policy is structured. The only way to know where you stand is to read the wording, or have a broker read it for you.

Specific Equipment, Specific Risks

The dry hire question applies across a wide range of mobile plant, but some machine types carry additional considerations.

Excavator insurance is a good example. Excavators are frequently hired out on dry hire terms, and they're also frequently damaged by operators who aren't familiar with the specific machine. The risk profile of a dry hire excavator is meaningfully different from one operated by your own trained staff.

Similarly, digger insurance in NZ covers machines that are often cross-hired between smaller contractors on informal arrangements. The informality is exactly what creates the gap, no written agreement, no clarity on who's insuring what, and a dispute waiting to happen.

For any machine type, the principle is the same: the hire arrangement changes the risk, and the policy needs to reflect that.

What Happens When a Claim Is Declined

When a dry hire claim is declined, it's often because the policy had the narrower version of the owner's protection benefit, the one that doesn't extend to dry hire, and nobody checked before the machine went out.

Sometimes it's because there was no written hire agreement, and the policy required one.

Sometimes it's because the machine was on-hired to a third party without the owner's knowledge, and the policy excluded that scenario.

If you've already had a machinery claim declined, you'll know how frustrating that process is. The time to avoid it is before the hire, not after the damage.

At Gerrards, we review plant policies specifically to check how they respond to hire arrangements. It's a gap that's usually straightforward to fix once it's identified.

How Gerrards Helps Hire Companies and Contractors

We work with hire companies, civil contractors, and construction businesses across New Zealand. Access to up to 20 insurers means we can compare how different policies handle dry hire and wet hire arrangements, not just take the first option that comes back.

When we review a plant policy, we're looking at the specific benefits and exclusions that apply to how you actually use your machines. If you hire out on dry hire terms, that needs to be reflected in the policy. If you hire in plant from others, the hired-in plant cover needs to be there and properly structured.

We also review policies annually. Hire arrangements change, fleets grow, new machine types get added. A policy that worked two years ago may have gaps today.

Every business is different, your policy needs will depend on your specific circumstances. This is general information only. For advice tailored to your situation, get in touch with our team.

The Short Version

Dry hire and wet hire aren't just operational terms. They're insurance terms, and the distinction can determine whether a claim is paid or declined.

Check your policy. Get the hire agreement in writing. And if you're not sure whether your cover extends to the way you actually use your machines, ask a broker who'll give you a straight answer.