Renting Heavy Equipment: Do You Know Who Is Liable For A Loss?

There are many good reasons to rent heavy equipment rather than buy or lease it. However, you have to make sure that you understand how insurance works on that rental. If something happens to a crane your rented from a company like D Crane Rental, for example, then you don't want any surprises when it comes time to report it.

Who Insures the Rental?

One of the positives about renting heavy equipment in general is that you don't accept the liability for it. You don't have to add it to your books; you don't have to worry about paying to maintain it. Rental companies insure their equipment, and you likely have some form of insurance that can cover rented equipment as well.

But what happens if the rental company's insurance only covers up to a certain amount? What happens when your own insurance says they can't handle the price of that shiny, new, state-of-the-art crane or excavator?

Then it's all about you coming up with the funds to satisfy the difference. If it's a truly expensive piece of equipment, then it can mean disaster for your business. So how can you avoid such issues?

Understand the Risk Transfer

All insurance policies and most other deals involve a risk transfer. Whenever you sign on a line somewhere, there's always a chance of a risk transfer taking place.

When the rental company signs up for insurance, they transfer risk from themselves to the insurance company. When you rent from the rental service, they may transfer some of their remaining risk onto you. This isn't underhanded; it's just the nature of how insurance works.

You just need to make sure that you understand how much of that risk is being transferred to you when you rent equipment.

Speak to your own insurance company. Always check with your own insurance company. It doesn't matter what kind of insurance the rental company has or what additional coverage they offer.

Make sure the rental service has insurance. In some cases, the rental service may not even offer coverage. You will have to accept all of the risk if you rent the equipment.

Read everything thoroughly. When you sign contracts and agreements, don't do it blindly. Read them over and ask questions of anything you don't understand.

Look for insurance limitations. There's a monetary point where almost all insurance policies cut off. If there's a loss while the equipment is in your possession, you may have to pay anything beyond that limit out of pocket.

Inspect the equipment. You should always inspect equipment yourself or hire a professional to do it for you. You should also document what you find and the condition you receive the rental in.

While these rules are in place to help you protect yourself, it's important that you start with a reputable rental service. A good, professional service will have no problem with helping you understand what risk you're accepting when you rent.

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