When you rent equipment, it’s critical to have the proper insurance coverage in place. This can include general liability, commercial auto, and workers’ compensation.

Most concert rental equipment policies cover on an actual cash value basis rather than replacement cost. This difference can result in a significant out-of-pocket cost. This is why it’s important to review the rental contracts and insurance policies with your agent.

General Liability

If you let an employee borrow company equipment for personal use, you’ll need to have them sign a rental agreement and provide insurance that covers the rented equipment. Oftentimes this type of coverage is included in a commercial property or business owners policy (BOP).

While you hope that your customers will return equipment in the same condition you gave it to them, damage can happen. The equipment could be stolen, or it may be damaged during transport or while loading and unloading it from vehicles. Additionally, the equipment might be damaged or lost at the customer’s location or as a result of weather-related incidents.

Most rental agreements include indemnification/hold harmless language that holds your client responsible for any damages, losses or injuries caused by the rented equipment. However, if the client gets injured or their property is damaged by your equipment in their custody, you’ll need liability coverage to pay for lawsuits and related costs.

Property Damage

If the rental equipment you provide gets damaged while in a customer’s hands, it’s important to have insurance coverage that will protect you. This is where a general liability policy won’t fully cover your risks, because it won’t account for damage to the items in your possession. This is where a stand-alone policy like commercial property or inland marine will come in handy.

There are also specific policies that will protect your rented equipment like camera or party equipment. These are often cheaper than a general business policy and ensure your specific needs are met. Additionally, they also have the added benefit of protecting you against lawsuits filed by clients due to injuries or property damage caused by your rental equipment. A products and completed operations endorsement is an additional addition you may want to look for in these types of policy. This will also protect you in the event that a client takes your equipment to someone else before returning it.

Commercial Auto

Yes, rental equipment insurance is available for businesses that rent out any sort of equipment to non-employees. It is often included in general liability policies, or can be bought as a separate policy that can include a few different types of insurance.

One of the most important things to remember about rental equipment insurance is that it will cover you in a lot of situations where your customers might file lawsuits against you. For instance, if your client gets hurt using equipment you have provided them, or if the equipment accidentally damages their property, they may come to you seeking compensation.

A good policy will include products and completed operations coverage, which is a type of general liability that will take care of lawsuits from these types of situations. Also, if you have a truck or other vehicle that you use to deliver or return equipment to your business, a commercial auto policy should be purchased as well.

Workers Compensation

As you can imagine, equipment rental businesses have a lot of property on the line. And that combined with whatever your clients do to the equipment when it’s in their custody makes liability insurance a must.

While it’s important to insist that your clients purchase general liability in order to rent any of your equipment, it’s also a good idea to have your own policy in place. That’s because a client’s general liability policy won’t provide coverage if they accidentally injure themselves or damage someone else’s property while using your equipment.

Luckily, there are companies that provide specialty insurance policies for rental equipment and party rentals. For example, CoverWallet offers liability, commercial auto, and workers’ compensation policies you can bundle at a reasonable price. And it’s available as short-term insurance, perfect for your business’s specific needs. If you want to learn more, check out CoverWallet’s website. They’re known for making it easy to get quotes and purchase the insurance you need.