As an equipment rental operator you have several exposures to consider and we will make this the short version of Insurance 101. I have listed the 11 most important insurance coverage’s you should have:
- General liability is a must for operators as this will provide defense coverage in case you are sued for your negligence or your employee’s negligence. I am told frequently that they have the person sign the rental agreement or the waiver and they think that they are protected. Unfortunately we are in a country that allows anyone to sue for anything and attorneys that would take the case and pursue it. Defense costs are much more than the cost of the insurance!
- Non-Owned auto coverage is an important part of your protection, especially if you have employees using their own vehicles or vehicles that you do not own.
- Workers compensation is a mandatory in almost every state. Let’s not get into the discussion if you have employees or a subcontractor that is tax evasion and has a huge penalty. Workers compensation will provide for medical bills or disability or death of an employee or volunteer.
- Commercial auto insurance is important as your personal auto insurance policy has a “business use exclusion” which would kick in if you use your vehicle for delivery. The description of coverage’s that are available for commercial auto we would offer liability, medical, uninsured motorist, underinsured motorist, collision and comprehensive coverage’s. Some companies will also offer non owned auto coverage’s and physical damage coverage’s.
- Insurance coverage for your rental equipment is called Inland Marine coverage. No the name does not make sense but this coverage is for business property that is mobile in nature. Make sure that coverage is provided for your inventory while in your building.
- Property insurance will cover your building if you are purchasing it and the contents such as computers, fixtures, forklifts, and inventory that is inside the building.
- Business Income is another important coverage that should be considered. This provides income for a covered loss which could assist to cover the rent of your building, payments on your equipment, loss of potential income if your equipment is stolen or burned in a fire.
- Disability insurance is an important coverage for business owners. I was recently involved in a motorcycle crash, not my fault, and I will be in a wheel chair for at least 3 months, can not use my left hand due to broken thumb, can not use my right hand or arm due to broken collar bone and rib, broken right foot. Now what would you do if you have lost the ability to work your regular 40 hour job due to an auto accident, sports accident like playing softball, or if you ran your own business if you could not be in the office working due to the injuries? Disability insurance could provide up to 60% of your regular income, overhead protection could provide your rent and payroll so your business could continue. Purchase this when you are younger!
- Life insurance, nobody is going to die correct? Life insurance should be included in everyone’s portfolio. If you start a business you should increase your life insurance coverage either with a new policy or increase your current, depending on which works best for you. Life insurance can cover debt, whether it be personal or business related. It can be used to replace your income, provide college expenses for your children, train someone new to manage your business. Generally speaking you should have at least 7 times your annual income as a basis for what limit to purchase. No widow or widower has every complained that there was too much life insurance. I recommend 10-20 year term insurance. Purchase this when you are younger!
- Health insurance provides coverage for sickness or accident for you seeing a doctor or visiting a hospital. It may also cover your ambulance transportation and medicine if needed. You can have several deductible choices depending on how much you want to self insure. We carry a $2500 deductible for our family. You can purchase just a catastrophic medical policy that covers hospitalization or a major medical policy that covers everything from doctor visits to hospitalization.
- Long-term care insurance provides income to cover extra expenses due to a chronic illness or disability for people who cannot care for themselves for long periods of time. Long-term care services usually include symptomatic treatment, maintenance, and rehabilitation for patients of all age groups. My motorcycle accident would be a perfect example. I can not shower, cook, feed or dress myself, which is where long-term care would kick in. It is not just for senior citizens! Purchase this when you are younger!
There are different exposures for each company, do not use this as a firm line of action, review with an insurance broker that is experienced in your line of business and understands the exposures. You would not go to the friend of the family for a heart transplant if he was not a specialist……… The same with insurance. Any questions? Just an email or phone call away……