Equipment rented to others

Equipment rented to others insurance

Many contractor equipment policies exclude machines while they are rented to someone else. If you rent out idle equipment, even occasionally, the policy has to say it is covered.

Apply for equipment coverage Apply for rental general liability

Compact track loader digging in loose soil — Photo: Dmitry Ivanov, CC BY-SA 4.0, via Wikimedia Commons. Cropped.

Two different exposures

Renting equipment out involves two separate risks, and they belong on two separate coverages.

Physical damage to the machine while the renter has it: theft, rollover, fire, vandalism. This is inland marine.
Liability if the machine injures someone or damages property while rented. This is general liability, and many contractor GL policies exclude it.

Apply online

The online application asks the questions underwriters need for this coverage. Business owners fill it out directly, and insurance agents can complete it for a client or send it to them. Insurance agents can also request an appointment.

Apply for equipment coverage Apply for rental general liability

One policy

One equipment floater. Four coverages. Pick any combination.

You don't need four policies. Each of these is an option on the same equipment floater, and the application asks which ones you want.

Choose your coverages in one application

Rented with an operator or without

Carriers treat bare rentals (equipment only) very differently from operated rentals (your operator comes with the machine). Operated rentals are closer to contracting work. Bare rentals depend heavily on how well the renter is screened and what the rental contract says.

Bare rentals

The renter's own people run the machine, so you have no control over how it is used. Underwriters look closely at renter screening, the indemnity wording in your contract, and whether you require the renter's certificate before the machine leaves your yard.

Operated rentals

Your employee runs the machine on someone else's job. That brings in your workers compensation, your operator's training, and liability for the work itself, so it is often rated more like contracting than renting.

What underwriters ask about

Percentage of receipts from rentals versus your own contracting work
Whether rentals are bare or operated
The written rental agreement, including indemnity and insurance requirements for renters
Whether you require renters to show their own insurance
Delivery, setup and pickup of the equipment

How to get a quote for equipment you rent out

List each machine you rent out with year, make, model, serial number and value, and note which ones stay in your own fleet when not rented.
Estimate annual rental receipts and the share of your total revenue they represent.
Note for each machine whether it goes out bare, with an operator, or both.
Send a copy of your current rental agreement, including the indemnity, damage and insurance sections.
Describe how you screen renters and whether you collect their certificate of insurance before release.
Include any losses on rented-out equipment in the past five years, including ones you settled with the renter directly.

Common questions

I only rent a machine out a few times a year. Do I need anything?

Yes. Occasional rentals are exactly where gaps show up, because nobody thinks to tell their insurance until a rented machine is damaged. Ask for coverage for equipment rented to others to be added, even if the rental income is small.

Should my renter carry insurance?

Your rental agreement should require the renter to carry general liability naming you as additional insured and, for expensive equipment, rented equipment coverage naming you as loss payee. That makes their policy respond first.

Is this the same as running a rental yard?

A full-time rental business has its own class and its own application. See the equipment rental business page if rentals are your main source of revenue.

What if a renter never returns the machine?

Some policies exclude or limit loss when a renter keeps or sells the equipment, since it can be treated as a voluntary parting rather than theft. Ask how the policy handles conversion by a renter and what the rental agreement needs to say.

Need a contractor license bond?

Many states and cities require a contractor license bond before you can get licensed or pull permits. Find the bond your state requires.

Contractor license bonds

Ready for a quote?

One online application. Owners and agents both welcome.

Apply for equipment coverage