Best Insurance for Rental Equipment

Read our Advertiser Disclosure.
Contributor, Benzinga
February 18, 2022

Save big with Next business insurance + download their guide for FREE.

If you own a company that rents out various types of equipment, you might want to explore what insurance is available. It could be any equipment, including heavy machinery, gardening tools, party supplies or audiovisual equipment; if you invested a lot in the equipment you rent out, you want to ensure protection.

You not only want to protect your equipment, you also need to think about the liability risks associated with renting it. Read on and refer to Benzinga's take on equipment rental insurance.

Compare Equipment Rental Insurance

Companies like Lemonade, Progressive and Allstate provide their customers with quality rental equipment insurance. Lemonade is best known for allowing customers to customize their policies, pay claims quickly and provide quotes within days. Property, personal liability and loss-of-use coverage options are available. Renter's insurance received 4.9 out of 5 stars based on more than 30,000 reviews, and there is no hassle or paperwork. Expect to get paid in three minutes.

Progressive rental equipment insurance is as low as $5 per month when bundled with auto insurance. It provides financial protection for you and your equipment. You can get a quote and choose the right policy for you.

Allstate’s policy protects you and your belongings. You are eligible for a free quote at any time, and if anything is stolen, Allstate has you covered.

Rental Equipment Insurance for Businesses

For certain companies, like contractor equipment rental companies, services involve providing heavy equipment to customers who do not need the tools or items frequently enough to purchase them. Hot items like bulldozers, excavators or cranes fall under this category. In some instances, the equipment can be rented with an operator or not, depending on the company.

Equipment rental options include short- or long-term leases. Delivery and pickup services are sometimes offered, too. Most of the time, payments can be made at the time of rental for items that are needed for only a brief period or even sporadically over the life of the lease. Only when the lease specifies otherwise is the rental company responsible for maintenance and major repairs.

Owning a business that rents out equipment comes with some serious perils. If a customer is injured while using equipment you rented them, you are likely to be held liable for the ensuing damages, including medical costs and costs pertaining to property loss.

That’s why equipment rental insurance and business income coverage is necessary. It protects you and your business from lawsuits. All insurance agencies are different, so it is essential to research and gather information and quotes to find the best-suited policy.

Property damage: Under this type of insurance, the costs of damage your property sustains because of specific perils like fire, vandalism and theft are covered. In some cases, the contents in your company’s building may be protected as well.

Inland marine: For commercial property and equipment rental insurance to offer protection, the incident has to have happened on your business's property. To obtain this coverage, you need to invest in inland marine insurance. This type of policy covers moveable properties that are in transit and stored on another site outside your property. A perfect example is if your construction equipment is damaged, stolen or vandalized when it is off your property, inland marine insurance cover the cost of repairs or replacement.  

General and umbrella liability: This insurance covers costs of third-party bodily injury and property damage claims. If a customer files a lawsuit against you and states your equipment injured them or damaged their property, liability insurance, legal expenses, medical care and repair expenses are covered under general and umbrella policies.

Loss-of-use coverage and replacement coverage: Under this type of insurance, expenses you incur because of damage to your rental equipment are covered. Be sure to research what equipment qualifies for this form of protection. Only certain expenses are covered under loss of use. This type of insurance also, for the most part, has a start and end date, meaning it is only a temporary solution.

Cyber security coverage: As crazy as it may sound, if the device is electronic or can be hacked, you might experience attacks, hacking or even distributed denial-of-service (DDoS) attacks. Every company faces cyber risk, no matter its size although larger businesses are more vulnerable to being hacked. While the one-size-fits-all standard is rarely met for most companies, cyber policies indeed contain some combination of specific protection elements.

Rental Equipment Insurance for Consumers

You can offer rental insurance to customers through your carrier, so they are protected if they damage your equipment. With rental equipment insurance, you can mitigate losses and help the overall growth of the business — despite any claims or lawsuits that may arise.

Protect yourself, your business and your customer by investing in the correct type of rental equipment insurance. 

Rental Equipment Insurance — The Bottom Line

Benzinga urges you to work with a commercial agent when choosing rental equipment insurance. An agent is skilled in understanding your unique needs and can recommend the right level and type of protection for you and your business. An agent can explain any risks your customers face when renting equipment from you and help you determine the type of rental equipment insurance and level of protection your company needs.

Frequently Asked Questions

What kind of insurance do I need to rent out equipment?

General liability insurance is a safeguard against claims for bodily or personal injury, advertising mistakes and property damage. General liability insurance also helps pay for legal expenses like attorney fees and court settlements.

Every business needs general liability insurance. A single claim or lawsuit could bankrupt your business. This type of policy could also be required to win business. Many companies and government agencies refuse to do business with a company unless it can prove it has a general liability policy. 

Most states require you to carry workers’ compensation and unemployment insurance if you own and operate a business. Some states require you to insure yourself even if you are the only employee.

Insurance agents can help you check the applicable state laws so your company remains in compliance with rules and regulations.

What insurance do I need for a rental business?

A multitude of insurance options are available for a rental business. All companies, regardless of the industry, face risks that need to be covered by insurance. The most common and comprehensive policy business owners invest in is general liability insurance. The risks associated with a rental business include:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

Businesses are not legally mandated to carry general liability insurance, but choosing to operate without it is risky. Should your company be sued, you may face hundreds or thousands of dollars in fees. Make sure you have sufficient general liability insurance to assist in compensating for damages. 

Other insurance options to consider for a rental business are building, earthquake, flood, leasehold interest, real property legal liability, computer fraud, customers, goods in transit, business auto liability and physical damage.