Equipment Rental Insurance

Finding the Right Rental Insurance for You

When a person needs a party tent for a wedding, a rototiller to dig up a garden bed, or a cement mixer to lay some concrete, often the first place to look is an equipment rental company. Whether you need to rent equipment for a project or party, or you are in the business of renting out equipment and supplies, you may be wondering whether you need rentals insurance to cover your risks.

Where do you find equipment rental insurance programs, and which companies offer the best coverage at the best rates? An independent agent in the Trusted Choice® network can help. These agents have access to quotes from multiple insurance companies and can assess your needs and compare coverage costs. To get quotes on equipment rental insurance, contact a local member agent today.

Equipment Rental Facts

  • The majority of rental business income in the U.S. comes from tools and equipment
  • Tool and equipment rental accounts for about $2 billion in annual revenue
  • There are almost 3,000 businesses renting tools and equipment in the U.S.

Insurance for Equipment Renters

If you rent equipment, whether it is a specialty ladder, a trencher, a party table and chairs, or a dump truck, who pays if any sort of accident, injury or property damage occurs while you are using it?

The answer depends on several factors. Here are some possible scenarios:

  • You rent a piece of equipment, such as a chainsaw, tile cutter or lawn aerator, for a DIY project. Typically, the rental company will have you sign a rental agreement form with several items you must agree to. These may include:
    • An indemnification agreement: This means that if the rental equipment company is sued for liability while the equipment is in your care, you will take financial responsibility.
    • A hold harmless agreement: This means you agree to hold the rental company harmless if you are responsible for injuries or property damage associated with the use of the company's equipment.
    • A conversion warning: This means that if you fail to return the equipment as specified, it may be considered theft and the rental company may press charges against you.
  • You rent a truck, such as a U-Haul truck for moving furniture, or a dump truck to haul soil for your home landscaping project. Under these circumstances, you will need to check with your auto insurance provider to determine if your car insurance is adequate to cover your use of the truck. Typically, you can buy a short term policy from the rental company on the spot, if you do not have adequate insurance for the truck you are renting.

Of course, there are many other scenarios in which you may need to rent equipment or supplies, such as stereo equipment, a stage, furniture for a wedding or party, a bounce house for a child's birthday party, or medical equipment such as a wheelchair.

In each case, you will need to determine how to cover your legal responsibility. You will also need to know whether your current insurance policies, such as your homeowners insurance, will provide coverage for your risks when using rented items.

Equipment rental insurance programs vary widely depending upon the type of equipment and the risks involved. Sometimes equipment damage and liability coverage may be built into the cost of the rental, while other times the equipment rental service will offer you the choice to purchase coverage. Be sure to consider whether you are willing to take the risk of covering damage, total loss and liability claims before denying coverage.

Insurance for a Rental Business

If you run an equipment rental or party rental business, you may be wondering how to ensure that you and your equipment are covered against the risks you face. What if someone is injured while using your equipment? What if your equipment is damaged? Who pays?

For starters, you will need several basic business insurance policies, such as:

  • General liability: Provides coverage if you or your staff members are responsible for bodily injury or property damage to others.
  • Property insurance:
    • Covers your real property if you own your building
    • Covers your building contents, other than rental items
    • Covers your rental items
  • Commercial vehicle: Your policy will need to include auto liability to cover both bodily injury and property damage for yourself and all employees who drive on the job.
  • Workers compensation: Depending upon the laws in your state, you may need this coverage; it provides financial compensation to your employees in the event of a work-related injury or illness.

You will need several additional types of coverage to manage your risks as an equipment rental company. An independent agent in the Trusted Choice network can help to fully assess your risks and provide a complete rentals insurance package. Some additional coverage types you may need are discussed in subsequent sections.

Coverage for Rental Equipment

Your have risks regarding your rental equipment in two areas:

  • The equipment can be lost or damaged while in your possession or in the possession of a customer
  • The equipment can cause bodily injury or property damage

To adequately protect your tools, machinery and other rental items, be sure to work with a knowledgeable agent who can put together a complete equipment rental insurance package for you.

  • Inland marine coverage: An inland marine policy or "floater" policy will cover your equipment on your business premises or off the premises, regardless of who is handling it. Inland marine policies are normally written on an "all risk" basis and you will have to pay a deductible on each loss.
  • Enhanced general liability: Your general liability policy, if properly written, will protect you for any bodily injury or property damage liability arising from your operations, including rental items in the hands of a customer.
  • Rental agreement: For this agreement, you will need to work with your attorney. Your attorney will need to draft a rental agreement that allocates responsibility for the loss or damage of the rental items, as well as liability claims related to their use.

Note that regardless of how much responsibility the agreement transfers to the customer, you need to be fully insured yourself. For example, there is the possibility that the customer does not have adequate skills or knowledge to use the equipment properly. The customer may lend the equipment to a friend or neighbor to use before it is scheduled to be returned. If anyone is injured under these circumstances, you may be in a position to defend yourself in court.

In any given instance, the customer may not be willing or able to meet the contractual obligations in the agreement. Or, in a worse case scenario, the customer may leave with your property and never return.

Work with an agent who can advocate for your needs and will help to ensure that you are not left with coverage gaps that leave you exposed to liability and financial loss.

Important Rental Insurance Considerations

The rental agreement your customer signs should assign responsibility to the customer for loss or damage of the rental items, and for any bodily injury or property damage liability arising from the use of the rental item. However, when renting certain equipment, you have some responsibility as the equipment rental business.

Here are some important considerations:

  • If you rent a construction crane to someone not trained in its use, you could still be found responsible if the customer causes an accident of some kind. While your insurance may protect you, the insurance company may not continue your coverage going forward.
  • Some equipment should only be rented with operators. Some equipment will require training before being released to the customer.
  • You should have a clear understanding with your insurance carrier about any rules or restrictions concerning the rental of potentially dangerous or hazardous equipment.
  • If you are renting very valuable equipment, or renting equipment for a long period of time, you may want to insist that the customer purchase a policy on the equipment itself and/or a liability policy to cover its use. You can ask that you be an additional named insured on that policy. If you do have such a requirement, you should obtain a certificate of insurance as evidence that the requirement has been met. This will provide you with the best protection against having to make a claim on your own policy.

Your rentals insurance policy is an asset of your business. Protect it by using common sense in regard to what you rent and to whom.

Party Rental Insurance

Party rentals can be simple or complex, and may include:

  • Tables and chairs
  • Linens, silverware
  • Decor, silk florals and centerpieces
  • Grills, ovens, hot plates and food warmers
  • Tents, canopies, stages, dance floors and supplementary lighting
  • DJ equipment, pillars, podiums and arbors
  • Porta-potties

Your rental insurance program needs to be designed to cover all these items and more wherever they may be at any given time. If your equipment requires heavy lifting, use of items that can become very hot or can potentially cause a fire, be sure to discuss these hazards with your agent.

Video Equipment Rental Insurance

If you rent out cameras, video equipment, projectors and other audio/video supplies, there are a few important considerations to review with your insurance agent.

  • While your insurance will cover the loss or damage of the equipment, it may not pay for a unit that is returned in a non-functioning condition; you may be able to add this coverage as an additional rider.
  • You will want to ensure that your equipment is covered whether it is in use, in transit, or in storage.
  • You will also want to ensure that a wide range of risks are covered, including fire, weather damage and accidental damage such as dropping or scratching.

It's a good idea to work with an agent who has access to multiple insurance companies and can help you find the most targeted coverage for your needs at the most affordable rate.

Finding the Right Rentals Insurance for You

A rental company can be a challenging business. You will have to deal with many different people in various situations. There is always the risk of lost or damaged equipment or a liability claim arising from improper use.

A local independent agent in the Trusted Choice network can help you compare equipment rental insurance quotes from several different insurance and choose the best coverage for your needs and budget. Find a local member agent today to get started.

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