Does liability insurance cover equipment rental?


Let's first clarify the question. This is regarding liability covering rented equipment that is used in the course of the business operations.  You may be asking about the damage that is caused by a malfunctioning equipment that you have rented as part of your project.

The first thing you should do is to read the fine print. In most cases, a standard commercial liability insurance policy does not cover rented equipment. Usually, the coverage is only for equipment that the business actually owns.

This is mentioned in a liability insurance policy as Exclusion J under Coverage A. This term states that claims for bodily injury and property damage will only be paid for owned equipment and not property or equipment that is borrowed or rented by the company.

What you can do is to get an endorsement to cover rented or borrowed equipment if such rentals are really part of how you operate your business. You can also get the extended insurance that may be sold by the company that rented out the equipment.

What is important is that you are sure that all the aspects of your operation are covered. That way, there will no unpleasant (and costly) surprises. Always ask your broker or agent about the coverage. Don't make assumptions that just because you have insurance, everything is covered.

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