Lift Maintenance or Insurance: Who Pays When a Lift Breaks?
When a lift stops, two documents usually decide who pays to get it running again: the maintenance contract and the building’s insurance policy. Many owners assume one or the other will respond. Sometimes neither does, because each is written around what the other is assumed to cover.
This article sets out where the line tends to fall between lift maintenance and insurance, the gaps that sit between them, and what to check before you need either.
The short answer
A maintenance contract pays for keeping the lift running and, if it is comprehensive, for repairing most parts that wear out in normal use. The lift insurance claims we assess almost always start with an event: water, fire, impact or an electrical fault. The gaps are the things that belong to neither, and they are usually written into the maintenance contract’s exclusions.
What the maintenance contract is for
Routine servicing, call-outs and, under a comprehensive contract, the repair or replacement of most worn parts, subject to the listed exclusions. The word comprehensive is not a defined term, and two comprehensive contracts can cover very different things once you read the exclusions. Common exclusions include:
- Damage from vandalism, misuse or water ingress
- Items such as car finishes, lighting and landing indicators
- Work needed to meet a new standard or a change in regulations
- Obsolete parts that are no longer supplied
- Entrapment releases caused by misuse
Notice the first item. Some of the events most likely to end up as an insurance claim are the same events many maintenance contracts exclude. The contractor is pricing the risk of wear, not the risk of a flood.
What ends up as an insurance claim
Most lift claims we assess for loss adjusters, insurers and owners fall into a few patterns:
- Water entering a pit or shaft, whether from a burst service, a storm or firefighting
- Fire and smoke affecting the machine room, the controller or the shaft
- Impact damage to doors, entrances and car interiors, often in goods lifts and loading docks
- Electrical events affecting the drive and control equipment
Whether your policy responds to any of these, and on what terms, is a question for your broker. Ask for the answer in writing.
The gaps between them
Wear or damage?
In almost every lift claim the central question is whether the failure is consistent with the event being claimed, or with age, wear or deferred maintenance. Each type of event has its own signature, and its own argument about what was already failing beforehand. Without evidence of the lift’s condition before the event, that argument is hard to settle.
Obsolescence
Maintenance contracts commonly exclude obsolete parts, and obsolescence is also one of the main reasons lift claims stall. If the equipment cannot be reinstated as it was because the parts no longer exist, someone has to decide how that is handled. That leads to betterment: where reinstatement necessarily improves the installation, how much of the cost belongs to the event and how much to an upgrade that was coming anyway.
A scope written by the repairer
Whether it is a repair quote under the maintenance contract or a reinstatement quote for a claim, a scope written by the party who will carry out the work is very difficult for anyone else to test. It should be described tightly enough that more than one contractor can price it.
What to check before you need either
- Read the exclusions in your maintenance contract, not just the inclusions, and note which of them describe events rather than wear.
- Ask your broker, in writing, how the building’s policy treats lift equipment for each of those excluded events.
- Keep the records: maintenance logbooks, service reports, callback history and commissioning documents. They establish the lift’s condition before an event, and their absence is one of the most common reasons claims stall.
- Know the age and parts position of the equipment. If parts are already scarce, both the maintenance contract and any future claim will be affected.
- Test large quotes before you approve them. Ask which clause or which event a repair or reinstatement quote relies on, and have the scope reviewed independently.
Frequently asked questions
Does a comprehensive maintenance contract cover water damage to a lift?
Often not. Damage from water ingress is one of the most common exclusions in lift maintenance contracts. Check the exclusions list in your own contract.
Will insurance pay for a lift that has simply worn out?
That is a question for your broker. In the claims we see, the argument usually turns on exactly this point: whether the failure was caused by the event or by age and wear.
Who decides whether a failure was wear or damage?
The insurer decides the claim, usually on the advice of a loss adjuster. An independent technical assessment of cause, extent and reinstatement scope gives everyone the same facts to work from.
Can TLC assess a lift insurance claim?
Yes. We assess lift and escalator claims for loss adjusters, insurers, brokers and building owners across Australia. We do not repair lifts and we take no commission from anyone who does. See lift insurance claim assessment.
Talk to an independent consultant
If you want a second opinion on a maintenance contract’s exclusions, a repair quote or a claim, contact us or call (07) 5509 0100. You may also find these useful: what drives lift maintenance cost and fully comprehensive lift maintenance contracts.