By providing rental equipment, you save people from having to buy things that they only plan on using one time - and you make a profit while doing it. It works for everyone.
But are you safe and protected as you run your business? The best way to make sure you are is by carrying party rental business insurance.
Please remember: The information provided on this website does not, and is not intended to, constitute legal or financial advice; instead, all information, content, and materials available on this site are for general informational purposes only.
Do I Have to Have Insurance?
Your party rental business isn’t legally obligated to have insurance, but not having it is a huge financial mistake. Without it, you run your business with extreme risks, because you could one day experience an incident that forces you to face steep fees. Without insurance, you’ll pay those fees out of pocket, which could mean demise for your business.
Insurance can help compensate for damages that you experience, and it can also shield you from costly lawsuits and other liabilities.
Party Rental Business Risks
Here are a few of the risks that your business might face over the years:
- Customer Injuries (On-Site)
- In many cases, it’s up to the customer to come to your site to pick up or drop off their rented equipment. When this happens, there’s always risk for injury, such as those that happen when a customer slips and falls.
- Sudden Loss of Business
- If an incident such as a large fire occurs and destroys equipment that is difficult to replace, your business may have to close for repairs - and that might mean it never opens again thanks to revenue lost.
- Injuries Incurred From Rental Equipment
- Rented equipment always poses a risk to customers, especially if it is altered, damaged, or set up incorrectly. They might malfunction and cause injury or damage to property. If you rent inflatable equipment, this runs the risk of collapsing or moving, which could cause serious injury - meaning you might be faced with a lawsuit.
- Injuries To Employees
- Employees run the same risk of slipping and falling as customers. Slippery walkways paired with heavy equipment and steep stairs/inclines only increases this risk.
- Car Accidents
- If your company delivers equipment to a customer’s location, you run the risk of getting in a car accident with the vehicle used for transportation.
What Insurance Policies Should My Party Rental Business Have?
It’s wise to have coverage from a variety of insurance policies. Here are some of the most relevant policies that your business should consider:
- General Liability
- Business Interruption
- Workers’ Compensation
- Commercial Automobile
- Commercial Umbrella
General Liability Insurance
Premises and Operations
Coverage for premises and operations regarding general liability insurance covers bodily injury claims that occur on-site, along with property damage that occurs from your business’s equipment. If someone slips and falls on the premises or injures themselves loading or unloading equipment, the incident would be covered by the premises and operations liability policy under general liability insurance.
It also covers the cost of claims such as:
- Medical bills
- Repairs to damaged property
- Legal fees
Products and Completed Operations
This type of coverage involves bodily injury or property damage that is linked directly to the usage of your rental equipment. If your rental equipment malfunctions and causes damage to property or injures a person using it, this coverage will be a huge help.
Much like coverage for premises and operations, this facet of general liability insurance also covers medical bills, repairs to property, legal fees, and settlements.
Business Interruption Insurance
Business interruption insurance covers expenses that you experience from a sudden loss of business. If you, for some reason, lose your equipment supply, you might break contracts with customers, lose future contracts, and experience a halt in everyday business. This puts your employees at risk of lost income, and your business at risk of lost revenue.
Business interruption coverage protects small businesses from such loss and financial devastation. Under this coverage, expect protection for:
- Lost income
- Employee wages
- Regular loan/bill payments
- Temporary relocation
This type of coverage typically lasts for 30 days, but you can usually extend it for a fee.
Workers’ Compensation Insurance
If an employee gets injured while on the job, workers’ compensation insurance covers it. This type of injury may occur from handling equipment, car accidents, or incidents during set-up or tear-down. This insurance protects your business from lawsuits and covers medical expenses for the injured employee. It covers:
- Employees’ medical bills
- Lost income
- Disability income
- Funeral expenses
Commercial Automobile Insurance
Commercial automobile insurance covers at-fault accidents and pays for the treatment of injuries to a third party, along with property damage up to the policy’s limit. It covers car accident liabilities for business-owned vehicles, along with physical damage protection.
This covers collision damage and non-collision damage like falling objects, vandalism, theft, wind, and hail. The vehicle will be insured up to its value at the time of the accident, and most always includes a deductible.
Commercial Umbrella Insurance
If you experience an especially expensive claim, commercial umbrella insurance can cover you where you need it to. If you reach the limits of other policies, get additional protection from umbrella insurance.
If an accident occurs with your rental equipment that results in major injury or death, the cost of the lawsuits can get extremely lofty - it might just go over the limits of the policies you currently hold, and you’ll need the extra coverage where you can get it. Umbrella insurance protects your business against expensive lawsuits and makes sure you stay afloat.
Such policies may come as standard or part of a package.
The Price of Party Rental Business Insurance
There’s no one set price for party rental business insurance, as the amount you pay will depend on the size of your individual business and the coverage that you need. Your business might not need every facet of insurance that we’ve talked about - for example, if you don’t offer delivery, commercial automobile insurance would be a wasteful investment for you.
The number of people you employ at your business and the type of equipment you rent out also plays a big role in how much insurance you need and, therefore, how much your coverage will cost.
When you talk to your insurance company, they will go over all the relevant factors that contribute to the cost of your coverage. Along with the number of employees and type of equipment you hold, your insurance company also might look at:
- The size/condition of the structures your business owns
- Maintenance/condition of your leased equipment
- Number/type/value of vehicles you need to insure
- Employee training and certification
- Past insurance claims
- Past lawsuits
Shop Around and Get Quotes
The most effective way to shop for insurance for your party rental business is to shop around your local insurance agencies and get a few quotes. Every insurance company is different, which means they’ll all offer different bundles - one of which might be better for you than another. By comparing the quotes, you’ll be able to make the most informed decision for your business.
Tent and Table values our customers, which means we want you to be well-informed about all the details of your rental business - big and small.