You’re running a small rental equipment business that supplies much needed items and equipment to other companies in the area. You might even rent directly to the consumer, such as vehicles and furniture. Things are going great! However, the unexpected can happen at any time. To be financially prepared for when things might go wrong with your business, it’s a good idea to sign up for equipment rental insurance.
A policy from a reliable provider can cover you in almost every circumstance from a customer damaging your power tools to a forklift malfunctioning and injuring the operator. Of course, you’ll want to research the best companies and get more information about this type of small business insurance before moving forward a policy:
- Top 5 Providers of Equipment Rental Insurance
- What is Equipment Rental Insurance?
- Do I Need Insurance When Renting Equipment?
- Short-Term Rental Equipment Insurance: What is it and what does it cover?
- Heavy Rental Equipment Insurance: What is it and what does it cover?
- Is Rental Equipment Protected by General Liability Insurance?
- What Happens If a Customer Doesn’t Return Rental Equipment?
Top 5 providers of Equipment Rental Insurance
We researched more than 20 companies offering equipment rental insurance and here are our recommendation of the top 5 companies.
- CoverWallet: Best for Comparing Online Quotes
- Allied Insurance (Brokers): Best for Risk Engineering
- The Hartford: Best for Its Established Reputation
- Veracity Insurance Solutions: Best for High Risk and Unusual Industries
- Travelers Insurance: Best for International Companies
CoverWallet: Best for Comparing Online Quotes
CoverWallet is a digital commercial insurance broker. They work with several leading business insurance companies. The benefit of working with CoverWallet is that you can easily compare quotes from several companies in one place.
The agents at CoverWallet is also very knowledgeable. If you are not sure which insurance policies you need to have for your rental equipment company, you should give them a call. The agent will walk you through the process and give you a thorough explanation of the types of business insurance your business must have and should have.
Their basic plan with general liability starts at $39 a month. The standard plan starts from $49 a month and includes a BOP. Or, you can upgrade to the pro plan starting at $89 per month, which includes the BOP and worker’s compensation.
Allied Insurance (Brokers): Best for Risk Engineering
Insurance brokers who provide nationwide service, Allied Insurance has been specializing in rental equipment insurance for over 25 years. They connect clients with top-rated insurers who offer coverage for rental equipment companies. Allied also offers specialty coverage, such as loss of business income.
The Hartford: Best for Its Established Reputation
Founded in 1810, The Hartford has been around for over two hundred years. They sell coverage through a network of independent agents and brokers to over one million small businesses. They offer equipment and party rental insurance for clients with a number of policy options, like general liability, property insurance, and auto insurance. They also offer additional solutions, such as business income coverage and cyber security coverage.
Veracity Insurance Solutions: Best for High Risk and Unusual Industries
This is an excess and surplus lines (E&S) wholesale brokerage firm that offers coverage other insurance providers typically won’t handle. For instance, if the business has a poor loss history, needs more insurance than is typically provided, or operates in a hazardous or unusual industry. Small businesses that rent out less common items may want a firm like Veracity. As an example, they offer canoe and kayak rental insurance and bicycle tour and rental insurance to businesses.
Travelers Insurance: Best for International Companies
A global company, Travelers has the ability to meet insurance needs in over 120 countries. They offer equipment insurance primarily on heavy duty construction equipment, farm equipment, and industry machinery equipment. Through them you’ll find the usual options, like general liability, property insurance, and workers compensation. Plus, they offer commercial umbrella policy that covers large, unexpected events your other insurance can’t fully protect against.
What is Equipment Rental Insurance?
This broad term refers to a selection of insurance policies that an equipment rental company may want to buy to protect their business operations. Every company is different and the small business insurance provider that you choose will help you with selecting the ideal policies for your needs. However, a standard selection of equipment rental insurance policies are usually recommended in this industry. You may want to consider:
- Property Insurance: This is the broadest and most customizable insurance option and a must-have insurance policy for equipment rental companies. Property insurance can cover the reparation or replacement of your rental equipment and non-rental equipment when they are damaged or lost.
- General Liability Insurance: This protects your business in case you are at fault for personal injury, damage to another person’s property, or in the case of poor advice or negligence.
- Worker’s Compensation: Businesses may pay this through their state taxes, but if not, it is a good insurance to add on a policy. It covers wages and other payments to employees in case of injury on the job.
- Inland Marine: This unique insurance is also a must-have for businesses that rent out moveable equipment. It covers equipment and property that is in transport or away from the business location when damaged.
- Commercial Vehicle Insurance: If you rent out vehicles to customers, or have company owned vehicles, this insurance covers everything from repairs to loans and loan gaps.
- Loss of Income Insurance: Like the name implies, this policy will cover the loss of any rental income that is the result of damage to your equipment or your building.
Rental equipment companies may also want to look into a Business Owner’s Policy (BOP) that simplifies your insurance by wrapping some of these above policies up into one convenient package. Typically, BOPs include property, general liability, and loss of business income.
When looking for a specific policy covering the rental equipment, the rental company should make sure the policy also covers the lawsuits made by the renters claiming that the defects in the equipment they rent from you have caused damages to their people or business.
Do I Need Insurance When Renting Equipment?
If you own a business that is renting equipment to use, its expected that you will already have some insurance to cover your operations. You aren’t necessarily required to get insurance for the rented equipment, but may be asked if you want an optional damage waiver. This waiver limits the rental company’s right to make you pay for any damages to the equipment while in your care. If the equipment is a complex or moving vehicle, the rental company may also require that you show proof your employees are trained in its use, such as a forklift operator’s certification.
Short-Term Rental Equipment Insurance: What is it and what does it cover?
If you don’t have “optional damage waiver” when renting equipment to use for your business, you may consider getting a short-term rental equipment insurance policy. This policy will cover the damages or loss of the equipment while it is in your possession. Since you usually rent the equipment for just a few days or occasionally during the year, you don’t need to carry and pay premiums for the policy for the entire year.
Digital commercial broker like CoverWallet will help you find a good company with short-term rental equipment insurance policy.
Heavy Rental Equipment Insurance: What is it and what does it cover?
Homeowners or construction companies may need to rent construction equipment for their projects. These are considered heavy equipment. The damages caused by these heavy equipment might be substantial and the equipment itself are usually very expensive. As a renter, you may want to consider a rental equipment insurance policy to protect yourself and your business from damages the rental equipment may cause to your property and people, and the damages in and the loss of the equipment itself.
This rental equipment insurance policy is in addition to the business insurance policies you have already had in place to cover the risks of your business operations.
Is Rental Equipment Protected by General Liability Insurance?
General liability insurance protects businesses against personal injury and property loss suits brought against the insured, such as a rental equipment company. It can provide some protection if the equipment you rent out malfunctions and causes injury to another person or damages someone’s property. General liability doesn’t cover the cost of repairing or replacing that equipment.
You need property insurance to cover the cost of repairing or replacing the equipment that you rent out.
What Happens If a Customer Doesn’t Return Rental Equipment?
If a customer doesn’t return your rental property, the process you follow may depend on the value of what has been rented. Try to reach out by phone with reminders about the due date of the equipment. You may need to work out a later return date if a project has been delayed. If you want the equipment back sooner, press them by reminding them of the terms of the agreement and any late fees they’ll be charged.
If the customer still doesn’t return the property you may need to take legal action. Depending on the state you live in the property loss may be considered theft and the local police could help in retrieving your equipment. Otherwise, if your state considers the failure to return equipment a type of fraud it may be more difficult to bring criminal charges.
Last but not least, reach out to your insurance company as your rental equipment policy may cover part or all of the replacement of your equipment. Be aware that the policy may not specifically cover this type of loss. It’s always a good idea to check with your insurance provider if they do cover theft or fraud before it happens.
Similarly, if your renter carries another policy, especially in the case of heavy rental equipment, and the equipment has been lost or severely damaged, you may be able to recover your equipment by working with the renter and their insurance company.
Final Thoughts:
- There are many kinds of policies available for rental equipment companies with a variety of coverage, including property insurance, general liability, and inland marine insurance.
- The cost of rental equipment insurance can be quite affordable for small businesses, but reach out to the insurance provider directly for an accurate quote.
- Some of the best insurance companies to consider for your rental equipment insurance are The Hartford, Allied, CoverWallet, Veracity, and Travelers Insurance.
- You may need to purchase extra specialty insurance to protect your rental property when it is away from your business site, such as on the road or at a customer’s worksite.
