Risk Management Strategies for your Construction Rental Fleet
Construction equipment insurance is a must if you are a contractor or work in the construction field, but what if you are a dealership with a large inventory of rental equipment? With a large inventory of machines, tools, attachments and other equipment, repairs could be extremely costly. It is important that equipment dealers know and understand the risk especially in the equipment rental business. You want to make sure that your dealership takes all the necessary steps to make sure you are covered in case of loss, damage or theft.
Cover Your Assets:
When a customer rents equipment from your dealership, anything can happen. That’s why it’s important to reduce your dealerships’ liability with the proper insurance coverage, as well as appropriate policies to minimize exposure. All equipment rental businesses should have the usual insurance coverage for general liability, property, inland marine and auto. There should also be policies and procedures in place throughout your dealership that are followed prior to any rental transaction.
Minimize your dealership’s liability exposure by following these risk management strategies:
- Pre-qualify your customers- Always make sure potential customers are properly insured in the event of an accident. Make sure you know who will be operating the machine or attachments being rented and make sure the operator is properly trained on safe use of the equipment. If equipment requires any special certifications, make sure customer supplies appropriate documentation and have operator sign off on the rental agreement. Keep your customers and your rental business safe by selecting only those customers who can safely use the rental equipment.
- Safety/Warning labels and manuals- This is extremely important. Before any rental equipment leaves your dealership be sure that all warning labels are in place. These should include rules for safe operation, equipment ratings and capacities and maintenance schedules for the equipment. If warning labels become illegible over time, replace them. Also, always make sure that the operators manual is with the machine and renter/operator knows where they can be found.
- Pre-Rental inspection- Make sure an equipment inspection and maintenance program is in place at your dealership. Before any equipment or attachments are released for rental, make sure equipment has been inspected by a certified technician. This process consists of checking machine for any damage, making sure all necessary repairs and maintenance have been performed, all safety labels are in place and all fluids levels are topped off. Many dealerships use a checklist or rental inspection list to make sure all points are looked over and the dealership and renter sign off on it.Develop a rental agreement- Develop a rental agreement that details the contract between your dealership and the rental customer. This contract should state all the terms of the rental (Duration, return date, cost, additional costs, etc.) It is also good practice to use a rental agreement for non-revenue rentals as well as loaners. The agreement should also state all terms and conditions established by the dealership and both parties (dealer and renter) must sign off on agreement. A properly written rental agreement will protect your dealership in the event of an accident or injury during the rental period.
Coverage per transaction:
With a loss/damage waiver (LDW) program your dealership can offer additional coverage to your customers to give them additional protection on equipment during the rental period. Implementing a loss/damage waiver (LDW) program is easy and the results are immediate. A solid LDW program can be a benefit to both parties, as it can be a profit center to the rental company while offering customers some protection in the event that the equipment they are renting is lost, stolen or damages.