Procuring all the essential insurance policies for your business can be daunting. It’s difficult to sort through all the options to determine what coverage is necessary for your particular needs. We recently spoke with Jim Ricker, JT Bates Group’s co-founder and insurance consultant and asked him for his top “must-have” insurance policies for all heavy equipment rental businesses.
D&O Policy (Directors and Officers)
This policy protects the personal assets of your company’s directors and officers if they are sued for alleged wrongful acts related to their duties. It will cover legal defense costs and settlements arising from claims of mismanagement, breach of duty, or errors in judgment.
Heavy equipment dealers also have to make complex decisions regarding acquisitions, contracts, and regulatory compliance. A D&O policy safeguards your leadership from personal financial risk and ensures that they can focus on growing the business without worrying about future liabilities.
- Example: A competitor sues your company’s board for alleged misrepresentation during a large equipment auction, claiming it negatively impacted their business. The D&O policy would cover the legal defense costs and any potential settlement.
EPL/EPLI Policy (Employment Practices Liability Insurance)
EPLI shields your business from claims made by employees alleging wrongful termination, discrimination, harassment, or other employment-related issues. It covers legal costs, settlements, and judgments arising from these claims, which will protect your company’s reputation and financial stability.
- Example: A former mechanic claims he was wrongfully terminated based on age discrimination and files a lawsuit. The EPLI policy covers the costs of defending against this claim, including legal fees and any resulting settlement.
Fiduciary Policy
A fiduciary policy protects those responsible for managing employee benefit plans, such as 401(k)s or health insurance. It covers claims of mismanagement, breach of fiduciary duty, or administration errors. It also mitigates the financial risks associated with mistakes in handling employee funds or benefits.
- Example: An employee sues the company, alleging that the 401(k) plan administrators made imprudent investment choices that resulted in significant losses. The Fiduciary policy would cover the legal defense and any potential settlement.
Crime Policy
A crime policy protects your business from financial losses due to criminal activities, such as employee theft, forgery, or fraud. This policy is vital in the heavy equipment industry, where high-value assets and financial transactions are common. It safeguards your company from internal and external threats that could lead to substantial financial loss.
- Example: An employee in the parts department embezzles funds by creating fraudulent invoices and diverting payments to a personal account. The crime policy would reimburse the company for the stolen funds.
Worker’s Compensation
Another essential insurance policy for your dealership is Workers’ Compensation. This coverage provides benefits to employees who suffer job-related injuries or illnesses. It covers medical expenses, lost wages, and rehabilitation costs and also protects your rental dealership in case of a potential lawsuit.
- Example: A heavy equipment operator is injured while operating a forklift in the dealership’s yard. Workers’ Compensation would cover their medical bills and lost wages during the employee’s recovery.
Cyber Policy
Cyber insurance protects your business from financial losses as a result of cyber attacks, data breaches, and other technology-related risks. It also covers costs associated with data recovery, legal fees, customer notification, and business interruption.
Equipment dealerships rely heavily on technology for all facets of their business, like tracking inventory, customer data, and financial transactions. A cyber policy helps mitigate the financial impact of any cyber-related incidents.
- Example: A ransomware attack encrypts your customer database and financial records and demands a ransom for their release. Cyber policies cover data recovery costs, potential ransom payments, and any legal expenses.
Take Action Today on Essential Insurance Policies
Make sure that your heavy equipment dealership is fully protected. Contact us anytime to discuss your insurance needs and we’ll schedule a comprehensive insurance policy review and explore tailored coverage options for your business.
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Email: info@jtbatesgroup.com
Phone: (877) 595-7850
