Monthly Archives: July 2016

Stand out in the crowd in the Construction Business

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You be in whatever form of business, you would always expect yourself to do something different that will set you aside from the rest of the crowd. Being with the crowd will get you success but you may probably not have the satisfaction from your business which is more important if you are the one who has taken the pain to establish it in the first place. If you get no satisfaction from what you do, it is better that you stop doing that and start working with something that makes you feel important in your eyes. Running a construction business like all others do might become a bit monotonous and if you want to make a difference in this industry then all you need is to see yourself standing out from the crowd. This does not imply that you do not belong to the group. It is just that you think differently than the rest of the folks and that is what is needed to achieve success in this form of an industry.

Be as innovative as you can:-

Innovation is the key to success in any business. You have to keep yourself busy in thinking when you are not doing anything. Remember, not doing anything does not mean you are doing nothing. You can think on what more you can do to make things work for you. Try to foresee situations and take necessary measures to tackle them right from the beginning. Think of something creative that you can apply in your business and that nobody else have thought about or have ever dared to do. Innovation is all about trying new things out that others may find it to be little risky or may feel that it is not going to make a difference. If you feel that it is going to work for you, you should take the leap. You may come across people who will try to intimidate you by showing the negative sides of your idea but you know your idea better than anybody else does and you should ensure that you put it across to bring a difference in your business.

Be ethical and honest to your client:-

Honesty has now become a virtue. Not everybody has it and only few good men hold their heads high because they know that they have been honest all their lives. Maintain certain ethics and values for your company and ensure that everybody follows them right from the core of their hearts. This actually sends a message to your as well as other clients about your way of working. They indeed want to work with people who are honest with their work and maintain certain standard at all levels. At times, you may have to pay the price for being honest but that will be too less as compared to guys who aren’t with their work or with their clients. Slowly and steadily, you will see yourself acquiring more businesses just because you chose to be ethical.

 

Digging the dirt with used heavy construction equipment

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It has been seen that people belonging to the construction sector are mostly confused when it comes to putting new heavy equipment or a used one to task. It is quite obvious that the cost of the machine plays an important role for them to determine which one to go for. The cost of brand new heavy equipment will be undoubtedly expensive for which the business owner may have to take a loan from the bank. This means that he has invited a recurring expense to his business which if he fails to repay, the heavy equipment will be repossessed by the banks. So it is advisable that as long as you are not completely sure that you can pay the due in time, you should stay away from taking a loan. So the next viable solution is to go for a used one.

It makes ample sense to use second hand heavy equipment for digging the dirt in the construction site. So when we talk about second hand heavy equipment, it does not mean that you should be using a decade old machine. You should try to get something which is perhaps a couple of years old or for that matter a 5 year old machine will still suffice your business requirements. The one thing that you should be careful is about its regular maintenance. Since it is an old one, you have to ensure that the machine is regularly washed and oiled. This will only increase the life of the machine and will serve you for long.

Some of the dirt digging heavy equipment are excavators, backhoe loaders and to a larger extent graders also does the work quite efficiently for you. So buying these kinds of heavy equipment should be your priority. Getting banks loans on used heavy equipment also becomes easy as you do not have to go through a lot of documentation process. Since the loan amount will be fairly low, the financial institution will happily grant you loan. However, you still need to have a good credit rating to avoid any complexities while getting your loan approved. Just in case you have managed to allocate some capital to fund your need to buy heavy equipment, you can channelize those funds by buying used machines. As you are getting it at a lower price, it should fit your budget.

Repossessed heavy equipment are also used machines which are sold at a dirt cheap price. You got to identify the dirt digging equipment that is getting auctioned and place your bid to get the stuff. Experienced operators will be more comfortable working with older dirt digging heavy equipment as they must have worked on such machines before, so it will be like driving an old car.

Before you go ahead to buy a dirt digging heavy construction equipment, check if the machine is in order. You may not want to end up buying a messy one which will give you numerous technical issues. Get it checked by a mechanic first and if he feels that the machine is worth the price, you can go for it.

 

 

 

 

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Guidance is required in every step in the construction industry

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A person who is new to the construction world or has been a part of it for the last many years needs guidance at crucial juncture. It is somewhat dangerous for the future of any company when the boss starts taking every decision without even keeping the employees in loop. It is always possible that the decision he takes can backfire and if that does it can jeopardize the future of the company. Such kind of actions can pose a serious threat to the very existence of the company. It is therefore a must for any foresighted business owner to talk with his people about a scenario and check their thoughts on the subject. He might come across a lot of new ideas that he must have never envisaged. It actually opens the door for something new and the collective decision have more probabilities to succeed.

It becomes instrumental to understand whom should we take advices from. Taking suggestion from anybody will only land you into troubled waters. If it consists anything that needs people from the legal team to get involved, you need to connect to the legal department of your company and seek advice from them. If yours is a small company and you do not have any legal team working for you then you can seek advice from an attorney who has experience in advising on matters like these. It will be your job to identify the right person from whom you can expect valuable advices.

In a construction industry, the two departments where you require expert advice are legal and procurement of heavy equipment. Though you may understand which heavy equipment is required for what kind of work, you may still need some guidance from the experts. There is a possibility that you are not updated with the recent happenings in the heavy equipment industry and therefore there are chances that you may end up taking some incorrect decisions. This is why it makes ample sense to have a separate team who handles the heavy equipment part completely. Right from guiding you which machine is needed for what purpose to maintaining it, you can give the entire responsibility of machines to them.

Now comes taking some critical decisions in your business. Ideally, any sane businessman will never take a decision without consulting the head of different departments. He has to take everybody into confidence before he take a decision. For instance, there is a bridge building project and many are eying to get the contract. However there are some hassles that one needs to understand and after calculating the pros and cons one can come down to a concrete conclusion. In order to come to that conclusion, he needs to get advices from all the head honchos and only after summing it up he can finally put it across on the transaction table.

Some experienced men who have encountered a similar situation in the past will share their experience and will also caution you of any shortcomings. This is how their advices will push you towards success or save you from an evident disaster.

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Technology and Connectivity Fueling Digital Construction Jobsites

By Lonnie Fritz  which is a Heavy Construction Industry Consultant for Caterpillar Inc.  (Guest Post)

The fully connected digital worksite is more than likely the biggest opportunity construction project managers and fleet owners are missing out on when looking at enhancing their operations.

Intelligent construction is the way of the future. It’s not how hard you work in today’s construction industry, but rather how smart you work that is going to improve your bottom line. Having a fully connected digital worksite removes the guesswork and empowers contractors to expedite their projects with confidence.

Using equipment with CAT technologies can help your business increase productivity and better control costs by achieving specific results including:

  1. Managing your equipment costs

With the introduction of the Association of Equipment Management Professionals (AEMP) Telematics Standard in the winter of 2014, mixed fleet managers, either on-site or off-site, now have access to critical data concerning their equipment, such as machine location, fuel consumption and operator behavior in the palm of their hand.

Telematics data gives you more control over maintenance and repair needs of your fleet. The longer you can effectively stretch maintenance intervals, the more time and money you can save. Such data also brings maintenance and repair information to a manager’s attention before maintenance issues become critical problems. This substantially reduces unplanned downtime and repair costs.

  1. Making the most out of your fleet

Connected construction worksites allow project managers to get the most out of their fleets. The more connected your machines are and the more effectively your crew uses the data they produce, the faster you will start to see tangible results. Variables such as equipment utilization, in terms of right-sizing the number of machines on-site, and equipment productivity can be determined. Both can help in setting cost predictions for future project bidding.

  1. Taking your operators to the next level

Machine control technologies that offer automatic or automated functions help improve operator productivity, which improves the bottom lines of projects in several ways. A prime example of this is Cat GRADE, a part of Cat Connect Technology. Operating a dozer is one thing, but it takes far more expertise to shape terrain. With Cat GRADE in place, you can expect to reduce rough-grading and finish-grading costs, reduce material costs, and decrease rework overall by as much as 50 percent. Machine control technologies allow operators to manage the project and the materials, not just the machine.

As soon as you activate telematics data-feed capabilities and log into a reporting interface like VisionLink®, you’re able to take advantage of outstanding productivity benefits, as well. For most construction company owners who employ smaller fleets, this technology can deliver immediate productivity results. Larger fleets or fleets working several projects at the same time should concentrate on creating a technology plan centering around the most cost effective equipment and technology pairings.

When you decide to take your worksite digital, the decisions that need to made for that project can be made by the right people at the appropriate time in order to get the job done as efficiently as possible. However, the benefits are not limited to those areas mentioned above.

A positive byproduct of a connected worksite is an increase in safety. Our Cat® Connect Technology can send alerts and fault codes out to operators or foremen when there is a situation that requires their immediate attention. As more machines are connected on the worksite, your fleet will become progressively more efficient, safe and productive.

Falling behind the competition and facing greater profitability challenges are real risks in the construction world today. Technologies that enable optimally connected digital worksites reduce those risks. Ultimately, digital worksites are meant to make your work more efficient, improve your profit margins and enhance workplace safety. Why wait?

Guest Post

By Lonnie Fritz

Heavy Construction Industry Consultant

Caterpillar Inc

Buying water trucks

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Summer has created a furor amongst everyone and right across all the states in the US. People are finding it hard to tackle the heat and many are leaving for a short vacation to places where they can find the weather to be a bit cold. Well people can manage to move to cold places but not the industry. There are businesses that can be done at its present location. You can’t complete them remotely. For instance, people who are connected with the construction industry have to stay at the jobsite and ensure that the work is done. These set of people can’t move to a colder destination to take care of their business. They have to manage their stuff by remaining right there on the spot. So as far as the construction business is concerned during the summer the jobsite becomes hotter and in order to get it mild, the only solution is to continuously spray water on the ground. By applying that method, one can manage to tackle the problem of dust as well as can also keep the heat level under control.

The above method is not only applicable in the construction jobsite but also largely relevant in a mining site. It is to be believed that the temperature in a mining jobsite is relatively hotter than the construction site and therefore the use of water trucks to spray water is more needed in a mining jobsite. This very need of cooling down the site temperature has raised the demand for water trucks and which is why heavy equipment companies are in the mode of manufacturing water trucks. Though the demand of these trucks goes sky rocketing during the summer, it also does decent amount of business during other seasons. Since it is widely used to keep dust under control and keep many air-borne ailments at bay, it has therefore become a widely accepted tool for dust management.

Water trucks are not as expensive as you get other heavy equipment. You may find that well in your budget. For new companies who have just established their business and may not have allocated enough resources for buying water truck can go for other mediums to procure one. They can go for the ones that have been repossessed by banks and later sells them at an unexpectedly lower price or if they know someone who is interested in getting rid of their old water truck which is still functioning properly, they can bargain and get it at a good price. So buying a water truck should not be a problem for those who really want to counter the issue of excessive dirt floating in the air and rising temperature level in the jobsite.

Bank loans are also easily provided just in case you see that you are short of finance and need some sort of financial assistance. All you need to do is approach the bank with whom you have been transacting for a while and check if they can provide you a loan with a lower interest rate.

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Learn to save when generating profits in the construction sector

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It seems that we humans are programmed in such a way that we tend to spend a lot when we have enough funds with us and try to save when we are short of capital. Experts believe that it is grossly incorrect and we should be acting otherwise. Our savings should start when we have lot of funds at our disposal. These funds can be used when we are running short and can be a very useful resource to sustain till the bad phase is over. But since we have the habit of spending and at many times over-spending on not too important things we are not able to strive through difficult times. This is the reason why many people belonging to different industries wind up their businesses in the times of recession. If we analyze the recession period, it does not last more than few months. It is just that we do not have enough capital resources that we get the reason to blame recession for the debacle of our business.

When the economy is hit by depression and then recession, the industry that is affected the most by it is the construction business. Many small time construction houses and also some big houses are swayed out of business. One of the primary reasons why they could not deal with the hard times is that they have to pay their dues to the financial institutions from which they have borrowed huge sum of capital to fuel their growth without even foreseeing the future market conditions.

Since they have too much to pay back and they do not have many projects in hand, they tend to suffer huge losses. On the contrary, the companies that do not have any dues to pay are able to strive during that time. As a matter of fact many small construction companies and contractors were able to carry on their businesses by cutting costs but they did not have to wind up their shops.

This is perhaps a good lesson for all those who get into the mode of spending more whenever they earn huge profits. They should rather save more for the difficult times. They can allocate an amount for contingency purpose and keep adding money to that account. They should keep growing the amount in that account so that whenever they need to take any major business decision that requires money, they have a sizeable amount in their kitty that they can look at. In this way, they also reduce their dependency on financial institutions that are ready to lend you money at high interest rates. It makes no point in borrowing money at high interest rates. On the contrary, if you can manage to earn some interest by investing in liquid risk-free ventures, it can be highly beneficial for you as well as for the growth of the company.

Eventually, it is the habit that you inculcate in yourself. You have to instill the habit to save money and invest it rather than spending on not so important things.

 

 

 

 

What’s Possible by using Cat Link Technologies

By Craig E. Cutting which is a Construction Technology Application Consultant for Caterpillar Inc.  (Guest Post)

The amount of data that construction machines produce due to advances in technology can be overwhelming for fleet managers who don’t have the tools in place to analyze it. Hundreds of onboard sensors and processors spit out massive amounts of data, and if you don’t have your operation streamlined, critical data points can get lost or simply overlooked. Data is wirelessly transmitted from your machines communicating information such as the location, status, fuel consumption and idle time of your equipment. Viewing this real-time data, project managers can make timely, fact-based decisions to boost productivity and reduce costs.

 

Cat LINK, a part of Cat Connect Technology, includes two key components— Cat® Product LinkTM and VisionLink®. Product Link is the hardware component of the technology and VisionLink is the software. Product Link grabs data from machine sensors and control systems and transmits it to VisionLink, which lets you view the data on any web-enabled device and use it to make quick, informed business decisions.

 

The benefits of using technology like Cat LINK stretch across all your business operations, but some of the quick highlights include:

 

  1. Controlling your fuel costs

Fuel consumption information is some of the most valuable information you can collect and use. Some industry experts say it’s not unusual for idle time to represent as much as 50 percent of total running time. Tracking and reducing idle time can have an immediate payback in reduced fuel costs.

If fuel consumption goes up suddenly—and your operator’s task hasn’t changed—it’s a signal that something else needs attention. Here are just some of the problems fuel data can help you uncover before they result in unwanted maintenance or repairs and increased operating costs:

 

  • Excessive idle time
  • Dirty fuel injectors
  • Plugged air filters
  • Contaminated fuel filters
  • Defective sensors
  • Faulty Engine Control Module
  • Worn piston rings or leaky valves
  • Slipping clutch or transmission
  • Improper lube oil viscosity
  • Undersized machine, bucket or work tool
  • Low tire pressure or worn tires
  • Aggressive or untrained operator

 

  1. Increasing utilization by studying when equipment is not being used

It’s hard to see patterns when you have multiple worksites or equipment working in different locations. With the data in front of you, you can look for alternative uses of equipment—any other function it could serve to generate revenue. Your information may reveal that trucks sit idling too long, burning fuel just to be loaded. By analyzing the data you may find enough idle time exists that you can park one of the trucks. This eliminates the fuel cost of that truck and makes cycle times more efficient for the remaining trucks. Another quick win idea would be using your trucks to contract haul during non-working periods.

 

  1. Using data to manage maintenance intervals

Analyzing your data can help you increase the efficiency and cost effectiveness of your maintenance schedules. It may surprise you how long you can effectively stretch maintenance intervals, saving time and money.

 

  1. Creating a fast start team

The information you gather from your machines has the ability to positively impact many areas of your worksites from utilization and uptime to operating costs and billing. Using a cross-functional team to review this information clarifies analyses and recommendations, which can’t help but result in better decisions. It also means that any hurdles can be overcome by the team and not sit completely with a single person.

 

Virtual Site Solutions, a joint venture between Caterpillar and Trimble, is also in the midst of updating VisionLink throughout 2016, making it faster and easier to use, especially with a smartphone or tablet. Some of the improvements users can expect to see soon include:

 

An even better mobile experience. Get ready for quick load times, uncluttered screens, easy-to-read content, good-sized buttons and simple navigation. You’ll have a great user experience whether you’re logging in with a phone, tablet, notebook or desktop.

 

Task-based apps. We’re breaking VisionLink down into smaller applications to better align with your everyday tasks. This will make the software easier to use and faster to update.

 

Turn down the fire hose. Drowning in data? You’ll have the option to reduce the amount of information you see. So if you only need fuel burn and machine location data to do your job, that’s what you’ll get. Someone else may need idle time and run time info, or hours to the next PM. The point is, we’re making it easy to access the data you actually need to do your job; nothing more, nothing less.

 

You’re in control, but we can help. Lots of people want to configure this software themselves, so we’re making it easy to do that. But if you’re not comfortable monkeying with VisionLink, start with the default settings. If they’re not right for you, your dealer can help with changes.

 

Simple dashboard. Everybody loves a dashboard – one convenient place to get a quick look at the key performance indicators you want to monitor. You’ll appreciate the new dashboard in VisionLink. And as you might expect, it will be easy for you to set things up exactly the way you want them.

 

At the end of the day, asset technologies are beneficial because they are designed to help operators solve issues and work more efficiently to minimize service costs and increase uptime. Having the data is important, but utilizing it correctly is what really makes the difference. Technologies like Cat LINK help you do more work at a lower total cost so you can build an even stronger business.

Guest Post

By Craig E. Cutting

Construction Technology Applications Consultant

Caterpillar Inc.

Five Ways Construction Technologies Can Improve Profitability

By: Jason Hurdis–Sr. Market Proffessional for Caterpillar Inc.

How many times have you heard the saying, time is money? That old adage has never been truer in the construction industry than it is right now. But today we can update that passage to say, “tech is money.”

Every construction company owner faces pressure to control costs and operate at lower profit margins. As you evaluate your own business operations, technology is something you should consider. By identifying areas where you can become more efficient, you can determine the types of technologies that will bring the biggest benefit to your organization’s bottom line.

Based on customer experiences and data, Caterpillar is constantly developing and refining advanced technologies to help make your equipment more cost-effective and efficient. CAT Connect technologies and services such as, LINK, GRADE, PAYLOAD and EMSolutions all help increase profit margins and worksite productivity. Here are several ways the right technology can help make your company more profitable:

  1. Control fuel costs

Fuel consumption information is some of the most valuable information you can collect and use as a construction company. Idle time can represent 40-50 percent of a machine’s total running time. Tracking and reducing idle time in your machines with CAT technologies can reduce fuel costs by as much as 50 percent.

Such technologies enable insights that wouldn’t otherwise be available to you. If fuel consumption goes up suddenly during a job, it could signal a bigger issue. Here are just a few problems CAT technologies can flag and help you uncover before it becomes a real problem.

  • Dirty fuel injectors
  • Plugged/Contaminated air filters
  • Defective sensors
  • Faulty Engine Control Modules
  • Worn piston rings or leaky valves
  • Slipping clutch or transmission
  • Improper lube oil viscosity
  • Undersized machine, bucket or work tool
  • Low tire pressure or worn tires
  • Aggressive or untrained operators
  1. Manage maintenance intervals

Analyzing the data our technologies provide can help business owners increase the efficiency and cost effectiveness of your maintenance schedules. The longer you can effectively stretch maintenance intervals, the more time and money you can save. The importance of planned maintenance – and the profitability it enables – cannot be overstated. CAT technologies can help you interpret your data, provide monitoring services and help you develop the most profitable maintenance schedules for your fleet.

  1. Increase machine utilization

It’s hard to see patterns or trends when you have multiple machines working at multiple worksites. With data produced from CAT technologies, business owners can make decisions on machine activation and optimization from one central point. If a truck is sitting at idle too long waiting to be loaded, you may find there is so much idle time between trucks in your fleet that you can park one of them.

The data produced by CAT technologies can identify underutilized assets in your fleet, and can help managers eliminate the need for rental machines while also providing them with the information they need to forecast future equipment needs.

  1. Increased uptime

CAT technologies can provide companies with fault code alerts, which are messages delivered when a machine is working outside a predetermined set of parameters. These alerts cover machine-specific situations including engine over-speeding, high-speed directional shifts and changes in temperature and pressure. The benefits of receiving alerts like these are that they notify managers when maintenance and repairs are needed, which reduces unscheduled machine downtime and equipment repair costs.

  1. Improved bidding accuracy and competitiveness

CAT on-board systems allow companies to submit tighter, more competitive bids because of the data they provide. Companies today don’t need to pad their fuel numbers when bidding for a project; they can calculate exactly how many gallons per hour they need to get the job done.

Such technologies also are proven to increase materials savings by up to 10 percent, and decrease rework by as much as 50 percent. Using fewer materials and spending less time on rework allows companies to lower their bid prices, therefore, giving them a leg up on their competition.

CAT technologies are reshaping the process of using, managing and owning construction equipment. Construction companies that want to stay ahead of their competitors for projects both now and in the future must adapt and implement the proper technologies. It’s the best way to become more efficient while maintaining margins, quality and safety. Why give the competition the edge when the technologies present profitable opportunities? Because tech is money, and a more efficient fleet equals a better bottom line.

GUEST POST

By Jason Hurdis

Sr. Market Professional

Caterpillar Inc.

 

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Acquiring a construction business is always a viable option

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When you are looking to expand your business, the most viable option that you have in your hand is to buy someone else’s business and manage his clients. This helps you to get some readymade clients, resources and all the other necessary equipment that are required in this industry. But the hard part is to get a company that is ready to sell its stake to you. No one will ever want to sell a business that is making profits. It just does not make any sense to him to give it off to someone else so that he can make money on your hard work. Simultaneously, you will not be interested in taking companies that are running into losses. They may turn out to be a liability on your company.

Moreover, you have to spend more of your time focusing on the sick unit and getting it back from the scratch. It is sometimes not worth of your time and energy and to a larger extent your hard money earned. So how can one get hold of a company who wants to sell their business to a bigger company is something that we will talk in detail.

Talking about the construction industry, acquisition does happen in this industry and also at a slightly higher rate as compared to other industries. Here you will come across many contractors who have tried their luck but due to market fallouts are unable to sustain. Such small scaled companies may not be called as sick units as they are just out of business and not that they are incompetent workers. They can bounce back anytime and can take it from there. So if ever you get the opportunity to buy such a company that is run by a contractor who is now not willing to continue the business, you can pay him the amount and acquire his business. It means that you are now the owner of his resources and you decide the salary of the employees of his company.

In case of acquisition of a construction business, you not only get the resources at a lower price but also get experienced and competent workforce which can be utilized in different jobsites. You may wish to pay them a bit more so that they can be content with how things are moving. Remember, if you hire new workforce from out, you have pay them more for their services but in case of acquisition, you play safe and do not have to increase the package of the existing workforce.

You can get hold of a broker who has news about small sized construction companies and contractors. They will check and let you know if anyone is looking for selling their unit. You also need to do your homework well. Check the reason why the company is ready to sell its stakes. Is it because they can no longer afford the operational expenses or they have some other reason that you should know before you go for the deal. Check the history of the company before you finalize anything and only if you see no hurdle that you should be signing on the dotted line.

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Insure your heavy equipment before it gets too late

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Things have become quite expensive and losing something important and of high cost can put you in a big problem. This is why we are often advised by our financial advisors to insure our things before it gets too late. When you insure your important belongings the insurance company will pay you the coverage amount and you can use that money to buy a new one. We have the fear in our mind that our stuffs might get stolen or if it meets with an accident you will no longer be able to use it. This is perhaps the primary reason why you insure your stuffs.

For the same reason you also insure your home, your vehicle and there are some people who also insure their body parts because they consider it as the tool to earn money. Similarly in the construction business the owner of the business must insure his belongings too and the most important part of his belongings is the heavy equipment. Heavy equipment is expensive and also goes through arduous as well as perilous task which increases the incidents of minor or major accidents happening on the site. Being such an expensive item, if it suffers a major breakdown or needs to be replaced or gets stolen, the construction company will find it hard to get a new one without getting money from the insurance company. Apparently, this will also have a drastic impact on the progress of his project. This is why it is so important to get your heavy equipment insured with a good insurance company.

Ideally when you buy heavy equipment from a dealer or directly from the company, you are advised to insure the machine with one of the insurance company with whom they have their tie-ups. You have the option to either go with the insurance company that they have advised you or go for an independent company. So if you tell them of your choice of going with an independent insurance company it becomes your responsibility to ensure that you insure the machine with the insurance company of your choice.

Some insurance companies charge high premiums:-

Different insurance companies charge different amount of premiums. Some may be high and some may fit your budget. But the ones that charge high from you may also offer you few other services that a company with lower premium may not offer. So before you take an insurance cover for your heavy equipment, it is imperative that you read their policy related documents and understand the intricacies well. This will allow you to take the best call for your machine. There are some companies who charges nominal premiums but offer excellent coverage. So be wise and do good research before you pick up from the lot.

Go for companies that offer coverage on replacement cost:-

When you insure your heavy equipment on replacement cost basis, the insurance company will provide you the money without discounting the depreciation. They will give the amount on the basis of the coverage you have taken and not on actual cost basis. It makes more sense to go with a policy that has replacement cost and not actual cost.