1. General liability
2. Commercial auto
3. Workers compensation
4. Property or Inland marine
extra coverage’s to consider are;
6. excess accident medical
Now a brief explanation of what each coverage provides:
1. General liability insurance provides defense for a claim of negligence on your part or on the part of one of your employees. This is for bodily injury and property damage.
Example: you rent a bounce house, your employee delivers and installs it. Does not fully go over operating instructions or warnings and there is an injury. The injured party normally has a parent that will be filing a lawsuit against you for their child’s injuries and a pain and suffering claim. Of course their child was going to be a surgeon or professional athlete and this injury will keep their child from attaining stardom….. Most of the insurance policies will exclude medical payments to keep insurance costs down for the little stuff. But this policy type pays for the injuries if you are negligent.
2. Commercial auto insurance provides insurance while your vehicle is being used for business purposes. No your personal auto policy does not cover you!!! There is an exclusion in ALL personal auto policies for business use. If your employees use their personal auto to make deliveries or pick ups then you need Non- owned auto coverage also.
Example: Your employee is making his second delivery to the park for the birthday party. He arrives at 11 am as scheduled but it takes a little longer to set up as he can not get close enough to the spot to set up and is in a hurry to get to the next delivery. While leaving the parking lot a little girl runs in between two parked cars in front of his truck and is injured. He is driving his personal truck for you, (of course a 1099 subcontractor) and his personal auto policy denies coverage. You do not have the correct coverage so you are sued personally and corporately, of course along with the driver/1099 sub contractor……. not the correct insurance in place so you have to pay for the attorney and damages yourself.
3. Workers Compensation insurance provides coverage for employees when injured or killed on the job. It pays for doctor expenses, rehab, loss of income or death. In most states it is mandatory, if not you are still liable for them personally. Think about it, they are lifting 300+ lbs, what could possibly happen…..
Example: Joe is delivering a bounce house, while unloading he strains his back, or he jumps off the back of the truck and rolls his ankle. Besides having to go to Urgent Care or the Emergency Room, he can not show up for his regular job during the week. If he does not show up, he does not get paid. Since he can not work, his wife hires an attorney to sue you for loss of wages, his pain and suffering, their lost income from BOTH jobs, his medical bills, her loss of consortium, and a few other things thrown in……
4. Property coverage provides for loss to your business property, inflatables, blowers, etc. It could also provide coverage for loss of business income due to theft or fire of your inventory. Inland marine is not boat coverage, it covers property that is mobile by nature, such as an inflatable device. Your property policy will only cover up to 75-100 feet of your building, an inland marine will usually cover at your location, in your trailer, and at the location of the event. If you are operating out of your house, your homeowner policy will not cover your inventory, there is a business use exclusion also!
Example: You have your trailer loaded for Saturday’s deliveries, and someone hooks up to it and drives away in the middle of the night. You have 11 units in that trailer, all rented out and now you will have several upset customers, no inventory or trailer.
5. Disability insurance provides a portion of your income when you are out of work due to an injury where you can not work. More disabilities then deaths, not something to guess at if it’s going to happen to you or not.
Example: I was in a motorcycle accident August 4, 2011, broke my helmet, totaled my cycle, not my fault. A lady pulled in front of me, I was going approximately 40 mph, 1 1/2 blocks from work. I was in bed for 2 months, could not walk, shower, sit up, hold anything. My wife had to do everything for me from cutting my food to feeding me, bathing me, etc. I was in a wheelchair for 1 month, but could not wheel myself so my wife had to do it. She has not left me yet….. I have been in rehab since January, now looking at a surgery for my tendon in my ankle, another 3-4 months rehab…… I think I had a little loss of income…….
6. Excess accidental medical is a coverage that is offered with several companies now, we recommend it highly. It provides up to $10,000 accidental medical coverage without having to prove negligence. So if a participant gets injured, it will provide some initial coverage for the small issues. This way your general liability does not get touched!
Example: The child on the slide that you rented injured their ankle sliding down, got her foot caught in the side and had to go to the emergency room. Bill was $3000 with xrays and two aspirin and a glass of water. This coverage would kick in if the parents did not have health insurance, which many do not.
7. Umbrella coverage extends you liability limit above your general liability limit, your commercial auto limit, and your workers compensation limit. Usually we see people doing corporate events or that have more assets to protect purchase this coverage. If you are in a mall you will probably need this coverage, some are requiring up to $5,000,000 limits now.
Example: You have an serious injury where your employee did not stake down the bounce house correctly and a wind came up and one child is paralyzed. Your general liability policy only covers up to $1,000,000 per occurrence, but your umbrella policy provides an additional $4,000,000 of protection for you to settle the lawsuit.
Now these are brief descriptions of coverage’s that are needed for an operator of a rental business. I did not include life or health insurance in this example, but they are just as important. Please contact our office if you need additional information, clarification, or just want to buy me a dinner…