By Rachel Porter, Affordable Contractors Insurance
It’s par for the course for contractors to purchase equipment they regularly use when working on projects.
For example, roofing contractors are expected to have roofing nail guns, air compressors, reciprocating saws, and other tools in their inventory.
However, there are times when they need to rent or lease specialized equipment, especially when they only need it for a one-off project.
Let’s say they’re replacing the entire roof of a massive home, which means they have to remove a ton of shingles off the roof, a usually messy job if there ever was one.
Roofers can make their job safer, more efficient, and less messy if they rent a roofing trailer, which can help them lower old but still heavy shingles to the ground. A roofing trailer can also help raise new shingles and heavy tools to the roof.
Since renting a roofing trailer tends to be much less expensive than purchasing one, many roofing contractors resort to the former, and it would be the wiser choice.
The question is, do contractors insurance policies like general liability insurance cover rented equipment?
Companies that rent out equipment usually take out equipment insurance, which can help cover repair and cleanup costs should they ever break down or sustain damage in an accident.
However, equipment rental companies have every right to hold a contractor liable if the equipment they rented sustains damage while in their care. After all, equipment insurance typically doesn’t cover damage caused by a contracting firm.
A single repair job on a huge piece of rented equipment can run up to the thousands. Aside from necessary repairs, contractors who damaged a rented piece of equipment may also be held liable for any revenue losses the equipment-renting company might suffer while the equipment is out of order.
Considering the possible costs involved, it’s in the best interest of contractors that rent or lease equipment to make sure that their contractors insurance policy covers damage to rented equipment.
A standard general liability insurance policy—the most common type of contractors insurance—does not usually cover rented equipment. While it does protect you against claims resulting from injuries to people and damage to property, a standard liability insurance policy doesn’t usually mention anything about the equipment the policyholder rents.
Still, if you’re a contractor and you referenced rental equipment at the time you purchased your liability policy, you may want to double-check it because, for all you know, your insurer inserted clauses referring to equipment rental, and you didn’t know about it.
Suppose there’s nothing in your liability policy that says anything about equipment rentals. In that case, you can still get added protection by purchasing add-ons like coverage for Equipment Rented or Leased From Others.
By purchasing endorsements that add Equipment Rented or Leased from Others Coverage, you get certain protections for equipment you rent or lease from a third party.
The specific coverages and protections of such an add-on may vary from one policy to another, but it may include fire, theft, and vandalism as covered perils for equipment you rented or leased.
With this type of coverage, you should be able to shoulder repairs your rented equipment might need if it sustains damage. If the liability claim includes lost revenue because the equipment is out of commission, Equipment Rented or Leased from Others Coverage will likely pay for it, too.
If your contracting company needs to rent a specific piece of equipment from time to time and you need protection in case it sustains damage while you’re using it, you would do well to talk to your insurer and ask if they provide Equipment Rented or Leased from Others Coverage or any add-ons similar to it.
Keep in mind that offerings may differ from insurer to insurer, from the name they give the add-on to their specific protections. In any case, an add-on like that should give you some peace of mind when renting equipment to use for your business.
About the Author
Rachel Porter is the content specialist for Custom Contractors Insurance, LLC, an Arizona roofing and contractors insurance company. When not writing, she enjoys reading and mountain biking with her friends.
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