Key Takeaways
- Consider general liability insurance to protect against lawsuits from customers and third parties.
- Obtain property insurance to cover damage or loss to owned equipment, vehicles and property.
- Implement commercial auto insurance if vehicles are used for delivery or transportation of rental equipment.
- Acquire workers’ compensation insurance as required by law to cover on-the-job injuries.
- Evaluate cyber insurance to protect against risks and costs of data breaches or cyber attacks.
- Review equipment breakdown insurance to cover repair/replacement costs of owned machinery.
- Assess storage tank liability insurance if fuel storage tanks are onsite.
Introduction
As a business in the commercial machinery and equipment rental and leasing industry, it is important to understand the top types of business insurance that can help protect your operations. This article provides an overview of key insurance considerations for this industry.
General Liability Insurance
General liability insurance provides important protection for equipment rental businesses. It can help cover legal costs and damages from accidents and injuries that may arise from operating the business and providing rental equipment to customers. Additionally, this type of insurance protects the business’s assets, finances and reputation by defending against lawsuits related to rental equipment. It typically covers bodily injury, property damage and other liability claims.
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Based on industry data and analysis of risks associated with NAICS code 532490, the estimated average annual pricing for general liability insurance is around $3,000-$5,000 per year. This pricing was derived considering factors like employee count, annual revenues, claims history, safety protocols and practices. Businesses in this industry deal with heavy machinery and equipment which can impose liability risks if not properly handled or maintained.
Estimated Pricing: $3,000-$5,000
Property Insurance
Property insurance provides important protection for businesses in the other commercial and industrial machinery and equipment rental and leasing industry. It covers property, equipment, and assets against risks like fire, theft, natural disasters, and other events that could negatively impact operations. Additionally, property insurance offers liability protection if a customer is injured using rented equipment as well as business interruption coverage to replace lost income if operations are disrupted due to a covered event. Property insurance allows these businesses to avoid financial ruin even after experiencing losses by providing replacement value coverage for damaged or destroyed equipment.
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Based on typical factors such as industry risk level, location, property values, loss history, and deductibles, the estimated average annual pricing for property insurance for businesses in the Other Commercial and Industrial Machinery and Equipment Rental and Leasing industry (NAICS 532490) is around $2.50 per $100 of insured property values. This price was calculated based on national industry averages and assumes average risk levels and no unusual risk exposures.
Estimated Pricing: $2.50/$100 insured property value
Commercial Auto Insurance
Commercial auto insurance is an important tool for businesses in the commercial and industrial machinery and equipment rental and leasing industry. It provides essential protections for companies that rely on vehicles to deliver equipment to and from customers. The top benefits of commercial auto insurance for this industry include liability protection, physical damage coverage, medical payments coverage, coverage for hired and non-owned vehicles, replacement cost coverage for new vehicles, and uninsured/underinsured motorist coverage. Common use cases where commercial auto insurance is needed include delivery and pickup of rental equipment, transportation of equipment between locations, employee and business owner use of vehicles for business purposes. The estimated annual premium for a typical business in this industry would be around $4,500 based on average fleet size and risk factors.
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Based on average fleet sizes and risk factors for this industry, the estimated annual premium for commercial auto insurance would be around $4,500. This factors in things like 3 vehicles on average, predominantly light trucks and cargo vans used to deliver equipment, moderate average annual miles of 15,000 per vehicle, and average losses.
Estimated Pricing: $4,500
Workers Compensation Insurance
Workers compensation insurance provides crucial financial protection for businesses in the machinery and equipment rental industry. It covers costs associated with on-the-job injuries and illness as required by law.
The average estimated pricing is $1.50-$2.00 per $100 of payroll, which can vary depending on individual business risk factors like payroll amount, number of employees, types of machinery/equipment rented, safety protocols and claims history. It protects businesses from lawsuits if employees are injured, covers medical expenses and lost wages, and helps injured employees return to work.
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The average workers compensation insurance rate for businesses in NAICS 532490 is estimated to be between $1.50 – $2.00 per $100 of payroll. This rate is derived based on industry risk factors and average claim experiences. The rate may vary depending on individual business risk characteristics such as payroll amount, number of employees, types of machinery/equipment rented, safety protocols and past claims history.
Estimated Pricing: $1.50-$2.00/100 of payroll
Cyber Insurance
Cyber insurance is an important risk management tool for businesses in the Other Commercial and Industrial Machinery and Equipment Rental and Leasing industry. This industry handles significant amounts of customer data and could face costly damages and loss of business if a cyber attack or data breach were to occur. The top benefits of cyber insurance for this industry include coverage for restoring lost or damaged systems and data, liability protection for customer information, and paying for required notifications in the event of a breach. Key use cases that insurance would cover are responding to data breaches, paying regulatory fines, lost income during downtimes, and costs of investigations, legal services, and public relations after an incident. Based on risk factors, the estimated average annual cyber insurance premium for businesses in this industry is around $2,500.
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Based on the industry profile and risk factors, the estimated average annual cyber insurance pricing for businesses in the Other Commercial and Industrial Machinery and Equipment Rental and Leasing industry with NAICS code 532490 is around $2,500. This estimate is derived from typical pricing models that take into account factors such as annual revenue, number of employees/records, data security measures, incident response planning, etc. For businesses in this industry, the risk of a cyber incident is moderate given the use of computer systems and potential data/IP theft but the impact would likely be contained since customer/financial data is less targeted than other industries.
Estimated Pricing: $2,500
Equipment Breakdown Insurance
Equipment breakdown insurance provides financial protection for businesses in the other commercial and industrial machinery and equipment rental and leasing industry (NAICS Code 532490) from unexpected repair and replacement costs due to failures or breakdowns of owned or leased equipment. It covers costs such as repairs or replacements, hiring temporary equipment, lost business income during repairs, emergency contractor fees, and liability claims resulting from equipment failures. The estimated average annual premium is around $5,000 based on typical factors like total insurable equipment values, number of locations, size of business, and loss history.
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Based on typical factors such as total insurable value of equipment, number of locations, size of business, loss history, etc. the estimated average annual price for equipment breakdown insurance would be around $5,000. This price was derived based on industry data and typical premium formulas that take into account property values, deductibles, and other policy details.
Estimated Pricing: $5,000
Storage Tank Environmental Liability Insurance
Storage tank environmental liability insurance provides crucial protection for businesses that own or operate fuel storage tanks on their property. It covers cleanup costs, legal fees, bodily injury claims, and regulatory fines/penalties if a leak or spill from their tanks contaminates the environment. Key benefits also include: 1) protecting business assets by covering costs from pollution incidents, 2) meeting regulatory compliance requirements for underground/aboveground storage tanks, and 3) covering losses from faulty tank installation or maintenance issues. Common use cases involve paying third-party claims or relocation costs if a leak impacts others, and reimbursing consultants or legal expenses for regulatory reporting/compliance of leaks. Estimated annual premium would be $1,500 based on insuring one 10,000 gallon diesel tank typical of businesses in NAICS code 532490.
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After reviewing average pricing for similar businesses that own fuel storage tanks, the estimated annual premium would be $1,500. This is based on the typical risks and exposures of businesses in the NAICS 532490 industry owning one 10,000 gallon diesel storage tank. Factors like the tank size, age, secondary containment and spill prevention measures influence the final pricing.
Estimated Pricing: $1,500
Umbrella Insurance
Umbrella insurance provides valuable additional liability protection for businesses in the other commercial and industrial machinery and equipment rental and leasing industry. It covers claims exceeding the limits of underlying commercial general liability, auto liability, and other policies, filling gaps and offering higher liability limits to help protect both business and personal assets from lawsuits related to business activities. Some key benefits include providing coverage for risks not included in regular commercial policies, defending against large lawsuits seeking millions in damages from incidents involving rented machinery, and reducing overall insurance costs by eliminating the need for very high underlying liability limits.
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Based on typical pricing structures for umbrella insurance and factors such as business size, revenues, number of employees, types of machinery/equipment rented, loss history, and geographical locations, the estimated average annual premium for $1 million in umbrella coverage would be around $1,500. Umbrella insurance premiums are usually calculated as a percentage of the underlying commercial general liability and auto liability limits. For businesses in this industry, umbrella insurance provides additional liability protection above the primary policies and is an affordable way to secure higher liability limits.
Estimated Pricing: $1,500
Conclusion
Proper business insurance tailored to the risks faced by commercial machinery and equipment rental companies can help protect a business financially. By evaluating options like general liability, property, auto, workers’ compensation and other specialized coverage, owners can gain peace of mind and ensure their operations remain resilient in the face of unexpected losses or claims.