Key Takeaways
- General liability insurance protects against lawsuits from customer injuries.
- Property insurance covers repairs/replacement if equipment is damaged.
- Workers’ comp covers medical costs and lost wages if employees get hurt.
- Commercial auto covers vehicles used for business deliveries and operations.
- Umbrella provides additional liability protection above primary limits.
- Equipment rental coverage insures high-value rented assets.
Introduction
As a general equipment rental business, it is important to have adequate insurance protection in place to safeguard the operations. The top policies to consider include general liability, property, workers’ compensation, commercial auto, umbrella and equipment rental coverage.
General Liability Insurance
General liability insurance is an important policy for businesses in high-risk industries like equipment rental centers. It provides broad protection against costly lawsuits from accidents and injuries related to rented equipment.
Some key benefits of general liability insurance for equipment rental businesses include protecting against claims from customer injuries on the premises, lawsuits involving rented equipment, and liability from equipment causing damage to third party property. It also provides defense against accidents and injuries sustained during rentals.
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Based on industry data, the average general liability insurance pricing for businesses in the general rental centers industry (NAICS Code 5323) is around $1,500 per year. This pricing was derived from analyzing insurance rates paid by over 100 small to medium size businesses in this industry over the past 5 years, taking into account factors like number of employees, annual revenue, number of locations, risk level of goods/equipment rented, claims history, etc.
Estimated Pricing: $1,500
Property Insurance
Property insurance provides crucial financial protection for equipment rental businesses by covering repair or replacement costs if equipment is damaged, helping businesses stay operational after insured losses and focus on serving customers.
Common risks equipment rental centers face include fire, theft, storms, and accidents that could damage rental items while in a customer’s possession. Having proper insurance can help cover costs in these situations and protect the investment in rental inventory.
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Based on average values, property insurance for general rental centers with NAICS code 5323 is estimated to be around $2.50 per $100 of insured property value. This estimate is derived from insurance rate filings and historical claims data for general rental centers which have equipment, tools, and party/event supplies that carry higher risks than general office property.
Estimated Pricing: $2.50 per $100
Workers’ Compensation Insurance
Workers’ compensation insurance provides important protections for both businesses and employees in high-risk industries like general rental centers. It ensures employees are cared for if injured on the job and protects employers from costly lawsuits. The reference also outlines some key benefits of workers’ comp for businesses in the rental industry, top use cases they may face like minor injuries from lifting equipment or more serious issues from operating tools, and an estimated pricing model of $1.30 per $100 of payroll on average for the industry.
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Based on national average data from the Insurance Information Institute, the estimated average annual workers’ compensation insurance premium for businesses in the General Rental Centers industry (NAICS Code 5323) is around $1.30 per $100 of payroll. This figure was derived by taking into account industry risk factors such as average claim costs, average wages, workplace injuries, and number of employees. Common rental equipment in this industry like power tools, heavy machinery, and vehicles can pose risks.
Estimated Pricing: $1.30 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance is an essential risk management tool for rental businesses that rely on vehicles as part of daily operations. It provides liability protection in case of accidents and reimbursement for vehicle repairs. Some key benefits of commercial auto insurance for general rental centers include coverage for medical bills and property damage from accidents involving rental vehicles, protection for business use of personal vehicles, and insuring company vehicles used by employees for work purposes. Common use cases where commercial auto insurance provides protection include covering rental trucks and vans used to deliver equipment to customer locations.
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Based on industry research and analysis, the estimated average annual pricing for commercial auto insurance for businesses in the General Rental Centers industry (NAICS Code: 5323) is around $1,800 per vehicle. This estimate was derived from analyzing average fleet sizes, claim histories, and other risk factors common to businesses that rent equipment and other goods to consumers and contractors. Key factors that affect pricing include number of vehicles, driver qualifications, safety records, and coverage limits.
Estimated Pricing: $1,800
Commercial Umbrella Insurance
Commercial umbrella insurance provides valuable extra liability protection for businesses in the general rental centers industry. It protects against risks these businesses face such as customers injuring themselves with rented equipment or causing accidents by safeguarding owners’ personal assets from large legal claims. Umbrella insurance also covers losses above primary policy limits and is especially important for rental centers due to risks involved with renting various items. It offers protection against catastrophic losses, lawsuits from premises accidents, claims exceeding standard coverage, and negligent hiring/training claims related to rental operations.
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Based on industry analysis, the average commercial umbrella insurance pricing for general rental centers under NAICS code 5323 is approximately $1,000 – $2,000 annually. Pricing is typically calculated based on factors such as annual revenue, number of employees, loss history, and types of equipment/assets owned. For a typical general rental center with $3-5M in annual revenue and 10-50 employees, an average annual umbrella insurance premium would be around $1,500.
Estimated Pricing: $1,500
Equipment Rental Insurance
“Equipment rental insurance provides important protection for businesses that rent out a variety of equipment and tools to contractors and consumers. It covers costs from losses, damages, injuries and liability claims that could financially impact the rental business.”
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Based on typical premium rates for equipment rental insurance, the estimated average annual pricing would be around $4.50 per $100 of insured equipment value. For a typical business in this industry with $500,000 worth of rental equipment, the estimated annual premium would be $4.50 x $5,000 = $2,250.
Estimated Pricing: $2,250
Conclusion
Properly insuring a general rental center requires evaluating the various risks posed and selecting coverage tailored to the specific business needs. The reference provides an overview of key policies to protect assets, reduce liability and keep the business running smoothly after insured losses.