Construction Equipment rental photo

Construction equipment rental insurance covers equipment your company rents and protects you from having to pay for damages or replace it if it gets stolen. It can be purchased for short-term use or provide more permanent coverage, depending on how often you rent equipment.

We’re going to dive a bit deeper into this unique type of insurance coverage — and let you know where you can find it.

What does construction equipment rental insurance cover?

Equipment rental insurance covers tools and equipment rented from a rental company. It covers damages to the equipment, vandalism, and theft. Most rental companies offer it as an added service when you rent equipment from them, but it can also be purchased separately. Equipment rentals are generally covered under a property insurance policy.

It’s important to point out that equipment rental insurance does not cover maintenance issues and misuse or abuse of the equipment. Any damages caused by lack of maintenance or abuse will be the responsibility of the renting party.

How is it different than general liability insurance?

General liability insurance covers damages caused by tools and equipment that you own or rent. It does not cover damage to the tools or equipment that you rented. In addition, some tools and equipment may not qualify for coverage under a general liability policy, so you may have to purchase additional insurance, such as auto or equipment coverage.

Do Contractors Need Liability Insurance?

How is it different than a damage waiver?

A damage waiver does not provide the same coverage or protection that rental equipment insurance does. A damage waiver is a tool that rental companies use where they limit the potential damages you can get charged with to a certain percentage of the cost of the equipment. If it comes back damaged or stolen, you only owe the amount of the damage waiver.

A damage waiver simply limits your risk to a certain percentage of the value of the equipment. Insurance covers the cost of repairing the damage or replacement of the equipment.

How much does equipment rental insurance cost?

Rental companies may add a fee for equipment rental coverage, also called a damage waiver, that is 14–15% of the rental cost. The amount of coverage will vary depending on the company and the type of equipment you are renting.

Other factors that affect the cost of rental insurance include:

  • Age of the equipment and its value
  • Duration of coverage
  • Type of work being performed
  • Deductible and coverage limits

Shop around by getting multiple quotes before selecting an insurance carrier. An agent can help you get the best deal for your business.

Why do contractors need equipment rental insurance?

Contractors who rent a lot of equipment have more exposure to risk if they don’t have equipment rental insurance. Equipment can get damaged or stolen, and then they are responsible for replacing it. Some equipment can be quite expensive, so the price of insurance is quite inexpensive in comparison.

If you are always renting equipment or tools or need added coverage above and beyond what’s being offered by the rental company, you can purchase equipment rental insurance as a separate policy. You’ll continue to pay for the insurance whether you have rented equipment or not. Otherwise, it makes more financial sense to purchase it only when you need it from an equipment rental company.

Best places to get equipment rental insurance

Here are five great choices (in no particular order) of where you can get construction equipment rental insurance.

The equipment dealer you already work with

You can always check to see if your equipment dealer has a preferred insurance partner! They often offer equipment rental insurance policies through a third-party insurance company they have a partnership with.

The Hartford

Known for their stability and long history of serving customers.

BBB rating – A+

X Insurance

They provide customized liability insurance for areas that other insurance won’t.

JT Bates Group – Rental Shield

They specialize in equipment and material handling insurance.

BBB rating – A+

Balsiger Insurance

Balsiger is an independent broker and can help you find the coverage you need.

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