While many contractors purchase at least some of the equipment they use, there are situations when it makes sense for a contractor to rent or lease equipment instead of buying it. For instance, renting equipment can help reduce startup costs so new contractors can invest their capital towards other uses. Additionally, both new and established contractors sometimes need a specialized piece of equipment for a one-off project, and renting it is much less expensive than purchasing the equipment. Whatever a contractor's reason for renting equipment is, any contractor that rents or leases equipment should make sure their contractors insurance policy covers the rented equipment.

Contractors Who Rent Equipment Should Check Their Contractors Insurance Coverages

Contractors Need Insurance Coverage for Rented Equipment

Contractors generally aren’t responsible for servicing the equipment they rent, but they can be held liable for what happens to equipment while they have it. If rented equipment is damaged while in a contractor’s care, a contractor may be held financially liable for the damage.

Without adequate contractors liability insurance coverage, a single incident involving rented equipment could have a major impact on a contractor’s finances. Depending on what happened, a contractor might have to pay for the following:

• To recover the rented equipment (e.g. if it fell into water)

• To make any necessary repairs

• For any revenue the equipment-renting company loses while the equipment is out of commission 

Since many pieces of equipment that contractors rent are large, sophisticated, and expensive, these costs can add up. A single repair could cost thousands of dollars, which doesn’t even take into account recovery costs and lost revenue.

Contractors Insurance Policies Often Offer Coverage

Many contractors insurance policies protect contractors that rent equipment from these potential costs by providing Equipment Leased or Rented from Others Coverage.

Equipment Rented or Leased from Others Coverage provides various protections for equipment that contractors rent or lease from third parties. Depending on the exact terms of a contractors liability insurance policy’s coverage, this coverage may protect rented and leased equipment from fire, theft, vandalism, flood, and other perils. If equipment sustains damage in a covered incident, this coverage might help pay for any recovery, repairs, or lost revenue associated with the claim. (Exact coverages and protections vary from policy to policy.)

(This coverage shouldn’t be confused with equipment leased or rented to others, which is designed to protect companies that rent out their equipment to contractors. Equipment leased or rented from others is generally for contractors that rent equipment from other companies.)

Contractors Can Find Equipment Rented or Leased from Others Coverage

Many contractors insurance policies include at least some Equipment Rented or Leased from Others Coverage in their standard coverages. A few contractors liability insurance policies may not, though, and those that do might not provide as much protection as some contractors want.

Contractors that want more protection than their policy provides can usually purchase endorsements that add extra Equipment Rented or Leased from Others Coverage. These add-ons typically bolster the coverage that a contractors liability insurance policy provides for rented or leased equipment without increasing the price of a policy too much.

If you have a contracting firm that rents equipment and would like help checking your contractor insurance policy’s equipment rented or leased from others coverage, contact your insurance agent. They’ll be able to look up what protections you have. If your firm doesn’t have an insurance agent or needs extra coverage, call one of the independent insurance agents serving New Haven, VT to find out what all of your contractors liability insurance options are.