What Insurance Do Equipment Rental Businesses Need?
If you own an equipment rental business, there can be loss or damage to the items you rent. When you get rental business insurance, it protects your business and your equipment.
Rental business insurance is a customized insurance package to cover the different types of equipment that you rent and the risks you face.
You may hear rental business insurance also referred to as equipment rental insurance or construction/contractor equipment rental insurance. You may also hear it called insurance for heavy equipment businesses. No matter what it’s called and what you’re renting, this type of insurance provides protection for your equipment rental business.
How does insurance for an equipment rental business work?
It’s a package of insurance coverages that suits your specific equipment rental business. It protects your equipment rental business from such things as a customer getting injured at your rental site or can provide coverage should a piece of rental equipment break down.
How much does rental business insurance cost?
There isn’t a set price for rental business insurance. The insurance rate for your equipment rental business would depend on factors such as:
- Your location
- Your services
- Business size/Number of employees
- Amount of rental equipment
- Any past claims
Rental business insurance can include the following types of coverage:
Equipment and tool insurance
This type of coverage replaces, or repairs damaged, stolen, or lost equipment and tools, accessories, or other property that you use in your heavy equipment repair and rental business.
Anything valued at less than $1,500 is considered a tool and anything above that limit is considered equipment.
It can also be called equipment floater insurance.
Equipment breakdown insurance
If you rent out expensive heavy equipment, such as backhoes, pavers, and dump trucks, you need equipment breakdown insurance as part of your rental business insurance package.
Equipment breakdown insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment not automatically covered by a standard commercial property policy.
For example, a backhoe your equipment rental company rents out for excavation work won’t start because has seized up. Your equipment breakdown coverage may pay for the cost to repair the backhoe’s engine.
Commercial general liability insurance (CGL)
This type of insurance protects your rental business against common claims like third-party property damage (customer/supplier). CGL insurance also protects against third-party bodily injuries should a customer visiting your business and slip, fall, and get injured. It may cover a customer’s non-insured medical expenses and your legal fees regardless of the outcome of a lawsuit you face.
Commercial property insurance
Commercial property insurance can help keep you protected from property losses, such as theft, fire, or vandalism. It protects your equipment rental business and its contents.
You can also add earthquake insurance, sewer backup or flood coverage extensions.
Pollution liability insurance
Pollution liability insurance helps cover costs to clean up pollution caused by any work that your equipment rental business does. It can help pay for clean-up costs, civil fines, and emergency response expenses.
Mobile property insurance: The equipment you rent is regularly being moved and may not always be stored at a fixed location. Mobile property insurance covers your equipment in transit. It also covers theft that could happen due to property not being stored in a secure location, as opposed to commercial property insurance that covers property generally expected to be in a designated location.
Cyber liability insurance: Do you keep client information online and take online payments? If so, your equipment rental business could be hacked by cyberthieves. Cyber liability insurance will help protect you.
Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your computer system and you may also be liable for damages to third parties whose information has been stolen.
Business interruption insurance
If there is an insured loss at your equipment repair and rental business that’s severe enough to prevent it from being open, the expenses associated with getting your business running again will be covered.
This type of policy usually covers vandalism, fire, wind, flooding, and other risks (make sure to understand what your policy covers). Your policy will help compensate you for lost income and expenses that you will need to continue paying even while you are unable to work.
Equipment rental insurance helps protect your business and equipment. Speak to a Western Financial Group business insurance expert about insuring your rental business.
