5 min read · Updated . Reviewed by James Rock (National Partnerships Director).
Plain-English definitions of the terms you’ll meet when insuring and financing business equipment. Each links to a fuller guide where we have one.
- ABN
- Australian Business Number. EquipCover asks for it to confirm the equipment is used in a business; cover is for business use only.
- Agreed value
- A basis of settlement where the payout for a written-off machine is a figure set when the policy starts. Compare market value.
- Approved item list
- The equipment types our insurance partner covers, from excavators and tractors to trailers and generators.
- Asset schedule
- The list of insured items on a policy, usually with make, model, serial number and value. Keep it up to date as machines are bought and sold.
- Attachments
- Tools that fit a machine, such as buckets, augers and hammers. They’re on the approved item list.
- Balloon payment
- A lump sum owed at the end of a loan after all the regular repayments. It lowers the monthly repayment but raises the total cost. Balloon payments explained.
- Basis of settlement
- How a policy values a machine that is written off: agreed value or market value. Check it before you buy.
- Certificate of currency
- A document confirming an insurance policy is in force on the date it’s issued. Lenders need one before equipment finance settles. Full guide.
- Certificate of insurance
- Another name you’ll see for a certificate of currency: a summary confirming a policy is in force on the date it’s issued. Full guide.
- Chattel mortgage
- A business loan to buy a vehicle or equipment, where the asset is security for the loan and the business owns it from day one. How a chattel mortgage works.
- Conditional registration
- Registration for non-standard machines, such as tractors, forklifts and graders, that need limited road access. Each state sets its own conditions. Rules by state.
- CTP insurance
- Compulsory third party insurance, included with registration in most states. It covers injuries to people, not damage to your machine or to property. What conditional registration’s CTP covers.
- Dry hire
- Hiring out equipment without an operator; the hirer supplies the operator. Wet hire vs dry hire.
- Elevated work platform (EWP)
- Access equipment that lifts people to work at height, such as boom lifts, scissor lifts and cherry pickers.
- Excess
- The amount of a claim you pay yourself, as specified in the policy. Insurance excess explained.
- Finance lease
- Finance where the leasing company owns the equipment and you pay to use it. Compare chattel mortgage, where you own it from the start.
- Finance term
- How long an equipment loan runs. A multi-year policy can match it, from 12 to 60 months.
- A premium for the whole term, set on day one and not re-rated for claims or the market during the term. The insured value can still change by year: on a multi-year policy through EquipCover it’s 100% in years 1 and 2, then a 10% depreciation is applied each year from year 3.
- Hire purchase
- Finance where the financier owns the equipment until the final instalment, or until you exercise the option to buy.
- Instant asset write-off
- An ATO rule letting eligible businesses immediately deduct the business portion of an asset under the limit: $20,000, now permanent for small businesses. Guide.
- Insurance indication
- An estimate of your premium from your ABN and five details. It isn’t a quote or an offer of insurance.
- Insured value
- The value the equipment is insured for, entered when you get an indication (excluding GST).
- Interested party
- A lender or other party with a financial interest in the equipment, noted on the policy so it’s told of changes and can receive claim payments. Also called a mortgagee.
- Machinery breakdown insurance
- Cover for the repair or replacement of machinery that breaks down. Multi-year cover through EquipCover doesn’t cover machinery breakdowns, but does cover secondary damage. The exact cover, limits and exclusions are in the policy wording.
- Market value
- A basis of settlement where the payout is what the machine was worth just before the loss, which falls as it ages. Compare agreed value.
- Material damage
- Loss of or damage to the insured property itself, as opposed to liability for injury or damage to other people’s property.
- Mobile plant
- Self-propelled or towed machinery that moves between sites, such as excavators, loaders, telehandlers and tractors, as opposed to fixed plant.
- Multi-year policy
- A policy that runs for more than one year, here up to five, usually matched to the finance term. Multi-year vs annual.
- PDS (product disclosure statement)
- The document that sets out what a policy covers, its limits and exclusions. The wording that counts when you claim.
- Plant
- Machinery, equipment, appliances and tools used at work, from tractors to telehandlers.
- Policy schedule
- The page that records your details, the insured items and values, the period and the premium. Not a certificate of currency.
- Policy wording
- The document setting out exactly what a policy covers, its limits and its exclusions. Read it before you buy.
- PPSR
- The Personal Property Securities Register, where a lender registers its security interest over financed equipment until the loan is repaid.
- What you pay for an insurance policy.
- A loan that pays an annual premium up front, repaid in instalments with interest. If you default, you still owe the debt. Premium funding vs paying monthly.
- Re-rating
- When an insurer reprices a policy at renewal, for inflation, market changes and claims history.
- Residual
- Another name for a balloon payment: the lump sum left owing at the end of a loan or lease. Balloon payments explained.
- Settlement
- When equipment finance is finalised and the funds are released. Lenders need a certificate of currency before it.
- Small business pool
- Where the ATO’s simplified depreciation rules put assets over the instant asset write-off limit, depreciating at 15% in the first year and 30% after.
- Sum insured
- The maximum the policy will pay for an item. Through EquipCover, the insured value you enter, ex GST.
- Telehandler
- A telescopic handler: a lifting machine with an extending boom, on the approved item list.
- Underwriter
- The insurer that takes on the risk and pays claims. Through EquipCover that is our specialist insurance partner, named in the policy wording.
- Wet hire
- Hiring out equipment with an operator.
Ready to see a fixed premium for your machine?
Get your insurance indication in about 90 seconds.
Sources
- Moneysmart (ASIC): Excess, glossary definition
- Australian Taxation Office: Instant asset write-off for eligible businesses (updated 28 August 2026)
- Queensland Government: Conditional registration explained
- Safe Work Australia: Plant in agriculture
- business.gov.au: Types of business insurance
- Product information and approved item list from our specialist insurance partner (August 2026)
General information only, not personal advice. Read the policy wording before you buy.
