SUSTAINING A VIABLE EXCAVATOR BUSINESS IN THE 21ST CENTURY THROUGH INSURANCE
The purchase of inventory will most likely be your most significant upfront excavator rental business expense, but don’t forget about the minor details, such as storage space for equipment and employee salaries. You should also budget for insurance. People who aren’t your employees will be using your equipment, which could land you in trouble if the equipment is damaged or injures someone while it’s on the market. This is general liability insurance to protect you and your employees if your rented equipment causes bodily harm or property damage. A general liability policy typically costs between $400 and $600 per year for a small business. Use property insurance to cover any commercial space you own, as well as the contents of that space and any rental items. Commercial property insurance policies cost about $750 per year on average.
Commercial vehicle insurance protects you and your employees who drive on the job from bodily harm and property damage. Rates for this policy are determined by your and your employees’ driving records, but commercial vehicle insurance typically ranges between $1,200 and $2,400 for cars and $800 to $2,000 for trucks. Workers compensation insurance to cover your employees if they are injured on the job. Not all states require this. The rates for these policies differ by state, ranging from $0.75 per $100 of employee wages in Texas to $2.74 per $100 of employee wages in Alaska. Speak with an insurance agent to determine what other types of coverage your company may require. Once you have a general idea of your expenses, it’s time to put a plan in place to eventually turn a profit. Set prices for your excavator rental that will allow you to carry out your plan. To take out items for rent, most equipment rental companies require their customers to sign a few agreements.
Excavator rental is typically not covered by general liability insurance. However, each policy is unique, and your insurer may have included equipment rental clauses if your description of operations includes a reference to the rental equipment. If you are unsure, assume you are not covered until you can check your policy. Small businesses that do not frequently rent equipment are unlikely to have such equipment covered by their insurance policies. If your company rents equipment on a regular basis or if its operations have changed, you should notify your insurer immediately and obtain an updated policy. Construction Business Owners often recommend you inform your insurance company about the types of equipment your company rents and how much you spend on rentals at any given time. This will enable your insurer to adequately cover you. It is important to note that if you are renting a truck, your driver’s insurance or credit card will most likely not cover you.