Equipment Rental Insurance Policy Information
Equipment Rental Insurance. Do you own a company that rents out equipment? Whether it's heavy machinery, gardening tools, party supplies, or audio-visual equipment, you've invested a lot in the equipment you rent out.
Not only do you need to make sure that your gear is protected, but you also have to think about the liability risks that are associated renting out equipment.
Contractor equipment rental companies provide heavy equipment to customers who do not need these frequently enough to justify the purchase, such as bulldozers, excavators or cranes. Equipment may be rented with an operator or without.
Equipment may be rented on a short-term basis, or on a longer-term lease. Delivery and pickup services may be offered. Payments may be made at the time of rental for items needed for a short period of time, or periodically over the life of a lease. Unless a lease specifies differently, the rental company is responsible for maintenance and major repairs.
When you own a business that rents out equipment, the perils you face are very real. You may rent a piece of equipment to someone who subsequently becomes injured by the equipment. If this happens, you may be held responsible and held liable for the ensuing damages, including any medical costs and any costs for property loss.
Equipment rental insurance can mitigate your losses and help your business maintain its growth despite any claims and lawsuits that might arise.
How can you protect your equipment, your business, and yourself? - By investing in the right type of commercial insurance. What kind of coverage do you need? Read on to find out more about equipment rental insurance:
Equipment rental insurance protects your business from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked equipment rental insurance questions:
- How Much Does Equipment Rental Insurance Cost?
- Why Do Equipment Rental Companies Need Insurance?
- What Type Of Insurance Do Equipment Rental Companies Need?
How Much Does Equipment Rental Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small equipment rental businesses ranges from $37 to $99 per month based on location, type of equipment rented, payroll, sales and experience.
Why Do Equipment Rental Companies Need Insurance?
When you rent out equipment, you are counting on your clients do use it responsibly and return it to you in the same condition you gave it to them. You're also hoping that your equipment will work properly and won't malfunction.
But what happens if something goes wrong? A customer damages your video equipment, steals the party supplies that you rented out, or if a piece of heavy machinery malfunctions and injures a customer?
The cost of repairing damaged or stolen equipment could be astronomical. If a customer files a lawsuit against you, the financial impact could be even more severe. To avoid the risk of having to pay for such expenses out of your own pocket, investing in proper rental equipment insurance coverage is vital.
In the event that something does go awry, with the right insurance coverage in place, instead of paying the expenses yourself, your insurance company would cover them for you. In other words, equipment rental insurance can save you from financial devastation.
What Type Of Insurance Do Equipment Rental Companies Need?
The type of insurance you'll need depends varies and depends on a variety of factors; the specific type of equipment you rent out, where you're located, and whether or not you employ a staff, for example.
The best way to find out what type of insurance you'll need is by speaking with a reputable agent who has experience with commercial insurance.
With that said, however, there are certain types of coverage that all equipment rental business owners should invest in:
- General liability coverage. This insurance covers the cost of third-party bodily injury and property damage claims. For example, if a customer files a lawsuit against you, stating that your equipment injured them or damaged their property, general liability insurance would help to pay for any legal expenses, as well as medical care that the customer may require, and any repairs that may need to be made to their property.
- Commercial property. This type of insurance covers the cost of any damages that the physical structure of your commercial property may sustain as a result of certain perils, such as fire, vandalism, and theft. It also covers the contents within the building, including your rental equipment.
- Inland marine coverage. Your commercial property and equipment insurance won't cover your rental equipment unless it's on your property. To do that, you'll need to invest in inland marine insurance. This policy covers moveable properties while they are in-transit and while they are stored on another site outside of your own property. For example, if your construction equipment is damaged, stolen, or vandalized when it's off the premises of your commercial property, inland marine insurance will cover the repair or replacement expenses.
- Commercial vehicle insurance. Auto insurance to cover your business vehicles is important. This coverage should extend to your employees who use company vehicles.
- Worker's compensation. If you employ a staff, you'll also need to carry workers comp. If an employee suffers an injury while delivering a piece of your rental equipment to a client, for example, workers' compensation will help to pay for any related medical expenses, as well as any wages the employee may lose if he or she is unable to work while recovering.
Your Rental Business Agreement
In general, your business should have an attorney-approved rental agreement in place to allocate the responsibility of damage or loss of your rental items. This agreement should also address liability claims and the responsibility of payment of those claims.
Still, regardless of the responsibility assigned to the customer by the rental agreement, your business still needs adequate equipment rental insurance coverage. For instance, if there is a possibility that your customer lacks the knowledge or skill for proper equipment use, you may be left liable. If the customer loans out the equipment to someone else prior to returning it, you can be held responsible for losses or injury from the third party.
The customer might also be unwilling to meet the obligations laid out under the agreement. It may also be the case that the customer absconds with the property, leaving you holding the bag for replacement. In these scenarios, the right level and type of coverage can mitigate these losses and leave your business whole again.
If you rent out equipment that has a high replacement value, it may be best practice to require that the customer purchase insurance that covers any liability or loss for both the customer and your business and furnish you with a certificate of insurance to prove coverage.
Equipment Rental Companies Risks & Exposures
Premises liability exposure is moderate due to customers coming to the premises. Aisles must be adequate in size and free of debris with flooring in good condition. There should be no frayed or worn spots on the carpet, and no cracks or holes in the flooring. Sufficient exits must exist and be well marked, with backup systems in case of power failure. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
Contractors' equipment stored in the yard presents an attractive nuisance to children and teens. Fencing and barriers must be in place to prevent entrance, and the equipment disabled. Off-premises exposures are high, especially if the equipment is rented with an operator as liability extends to that employee and the use of the equipment. To limit contractual liability exposures, all items must be in good repair and not be altered in any way as any alteration could place the product liability exposure on the rental company.
There must be documented maintenance of the items in case an accident does occur and the product manufacturer cites lack of proper maintenance. Instructions for proper usage and all warnings about the product must be provided to the client. Machinery or equipment that could cause serious injury to the operator needs careful demonstration and instruction. The age and condition of the equipment are also critical.
Products liability exposure arises from the sale of used rental equipment. Items sold should be in good condition, without any modification, and should have all guards and protective devices intact.
Environmental impairment liability exposure is high due to the potential for contamination or air, surface or ground water, or soil from spillage or leakage of fuel storage tanks or the collision or overturn of heavy equipment or their transporting vehicles. If there are underground storage tanks, a UST policy will be required. All storage and disposal procedures must meet federal and state regulations.
Workers compensation exposure depends upon the type of maintenance and repair done to the rental equipment and whether items are rented with operators. Injuries may include cuts, amputations, burns, welding-related losses, back sprains, and hernia from lifting, foreign objects in the eye, slips, and falls. If the setup is done at customers' job sites or equipment is rented with operators, the rental company has little control over the customers' premises or hazards which may be in isolated areas or on rough terrain.
Employees can be injured off-site by slips and falls, rollover of machinery, falling objects, falls from heights, construction machinery of others, flying debris, or noise. Rupture of a fuel line could result in an explosion. A malfunction in the wiring could present a fire or electrocution hazard. If employees must handle any repossession, they may be assaulted or otherwise endangered during the repossession activity.
Since work at the office is done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar repetitive motion injuries that can be reduced with ergonomically designed workstations.
Property exposures include an office, storage and maintenance area, and yard for heavy equipment. Ignition sources include electrical wiring, heating and air conditioning systems, overheating of equipment, welding, and soldering. Flammable liquids such as paint, varnish, glue, and fuels used on-site for repairs and refueling must be stored away from heated areas in a fireproof cabinet. When welding and soldering take place on premises, they should be done in a well-ventilated area that is free of combustible materials.
Some equipment may require high voltage to operate, increasing its susceptibility to fire. All items must be stored in such a way that fire will not spread quickly. Unless disposed of properly, greasy, oily rags (such as those used to clean machinery) can cause a fire without a separate ignition source. Aisles must be kept free of debris. Property stored in the open may be subject to loss by wind or hail or a target for vandalism.
Appropriate security controls must be taken including lighting and physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Business interruption is a significant exposure, as large equipment rental tends to be seasonal. Loss of or damage to a large or expensive piece of equipment may result in the item not being available at a critical time.
Crime exposure is from employee dishonesty and money and securities. The exposure increases in the absence of background checks of all employees. Heavy equipment is expensive and a target for theft. Items must be carefully inventoried as they leave from and return to the premises to prevent employee intervention. All ordering, billing, and disbursement should be handled as separate duties. Frequent deposits should be made. Audits should be conducted annually.
Inland marine exposure is from accounts receivable if the company offers credit, computers, contractors' equipment, and valuable papers and records for customers' and suppliers' information. Ideally, equipment should be rented with a qualified operator who is aware of the proper use and handling of the item and who can refuse to do something that would exceed its capacity or otherwise endanger it.
When equipment is rented without the operator, instructions and clear guidelines must be provided as to how the equipment may and may not be used. The contract should hold the client legally liable for the items while in their care, particularly if the rented items are used to lift beyond their capacity, but secondary coverage is needed, as the customer may not be able to cover the cost.
Contractors' equipment may be damaged by fire, wind, hail, collision, overturn, or while being loaded or unloaded onto transporting vehicles. Theft is a concern as items are often left unattended at job sites or in storage yards at night and on weekends. The equipment should be disabled while not in use to reduce the potential for theft.
Commercial auto exposure may be limited to hired and non-owned for employees running errands. If pickup and delivery services are offered, the exposure increases significantly due to the potential for loss while loading, unloading, and transporting equipment. Transportation of heavy equipment requires careful loading and tie-down to prevent items from coming loose and toppling over during transport. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.
Commercial Insurance And Business Industry Classification
- SIC CODE: 7353 Heavy Construction Equipment Rental and Leasing, 7359 Equipment Rental and Leasing Not Elsewhere Classified
- NAICS CODE: 532412 Construction, Mining and Forestry Machinery and Equipment Rental and Leasing, 238910 Site Preparation Contractors, 238990 All Other Specialty Trade Contractors
- Suggested ISO General Liability Code(s): 16723
- Suggested Workers Compensation Code(s): 8107, 8010, 9534
Description for 7353: Heavy Construction Equipment Rental and Leasing
Division I: Services | Major Group 73: Business Services | Industry Group 735: Miscellaneous Equipment Rental And Leasing
7353 Heavy Construction Equipment Rental and Leasing: Establishments primarily engaged in renting or leasing (except finance leasing) heavy construction equipment, with or without operators.
- Bulldozer rental and leasing
- Construction equipment, heavy: rental and leasing
- Crane rental and leasing
- Earth moving equipment rental and leasing
Description for 7359: Equipment Rental and Leasing Not Elsewhere Classified
Division I: Services | Major Group 73: Business Services | Industry Group 735: Miscellaneous Equipment Rental And Leasing
7359 Equipment Rental and Leasing, Not Elsewhere Classified: Establishments primarily engaged in renting or leasing (except finance leasing) equipment, not elsewhere classified.
- Airplane rental and leasing
- Appliance rental and leasing
- Coin-operated machine rental and leasing
- Electronic equipment rental and leasing, except medical and computer
- Furniture rental and leasing
- Industrial truck rental and leasing
- Office machine rental and leasing, except computers
- Oil field equipment rental and leasing
- Oil well drilling equipment rental and leasing
- Party supplies rental and leasing
- Piano rental and leasing
- Plants, live: rental and leasing
- Rental and leasing of dishes, silverware, and tables
- Television rental and leasing
- Toilets, portable: rental and leasing
- Tool rental and leasing
- Vending machines, rental only
- Video recorder and player rental and leasing
Equipment Rental Insurance - The Bottom Line
Work with a commercial agent when choosing equipment rental insurance. Your agent is adept at understanding your unique needs and can recommend the right level and type of coverage for you and your business. By explaining your business model and the risk that customers may face when renting from you, your agent is better able to understand how much insurance, the type of equipment rental insurance insurance, and the level of coverage that your business needs.
Your agent can customize your insurance package to meet your needs and can compare rates for insurance policies that meet your needs with different companies. This gives you the ability to find the right equipment rental insurance policy for your budget.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Additional Resources For Retail Insurance
Read valuable small business retail insurance policy information. In a retail business, you need to have the right type of commercial insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
- Appliance & Electronics Store
- Art Gallery
- Bicycle Shop
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Clothing Store
- Collectibles Memorabilia Store
- Convenience Store
- Cosmetics Store
- Dry Cleaning
- Equipment Rental
- Funeral Home
- Furniture Store
- Gift Store
- Hardware Store
- Home Improvement Store
- Hotel Motel
- Ice Cream Shop
- Jewelry Store
- Lingerie Store
- Luggage Store
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pet Store
- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Scrap Metal Dealers
- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
- Thrift Store
- Ticket Agency
- Tobacco Store
- Toy Store
- Travel Agency
- Wig Store
Retail stores are susceptible to premises liability claims because of customer traffic, but large department and specialty stores are more susceptible than most.
All retail stores have significant property exposures. The on-hand stock represents a considerable investment, but the amount on hand fluctuates seasonally. For this reason, physical damage insurance on this property must be arranged carefully. When the insured occupies a non-owned building, insurance coverage must be arranged for the insured's interest in extensive improvements and betterments made to the premises.
Crime insurance, in the form of employee theft and money and securities coverage, is also very important.
The businessowners policy was designed with retail exposures and operations in mind. For this reason alone, it should always be the first type of package coverage to consider. However, for those risks not eligible for the business owners policy program, the commercial package policy (CPP) is a practical and convenient way to combine a number of coverages into one policy.
Retail businesses generate income through interaction with customers. This interaction is also how a customer can sustain an injury and then sue the retailer for damages. Hazards, exposures and operations both on premises and off are important and must be covered, but liability the retailer may incur because of the merchandise sold must also be considered and insurance protection arranged.
Inventory or stock is the major property exposure for most retail operations. Because stock values tend to fluctuate or have significant peaks at certain times of the year, value reporting or peak season valuation options should be considered. Business income coverage, including business income from dependent properties coverage, may mean the difference between a retail operation staying in business or being forced into bankruptcy following a loss.
When the insured occupies a non-owned building, insurance coverage must be arranged for the insured’s interest in extensive improvements and betterments made to the premises.
Most retail businesses offer endless opportunities for a variety of criminal activities. For this reason, the coverages needed must be carefully evaluated. Holdup and robbery losses may be the most obvious concerns but employee theft, fraud and counterfeit money losses are also serious issues that cannot be dismissed.
Retail businesses are gaining greater exposure to international issues because of the growth in sales via the internet. As these sales increase, the added exposures faced by these retailers must be evaluated. While their operating horizons are expanding so are their potential loss exposures.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Bailees Customers, Goods in Transit, Jewelers Block, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.