If you have a growing rental operation, you want to maximize the profits of your rental fleet while minimizing unnecessary risks or losses.
To help with that, we recommend that you regularly evaluate your procedures. There are several best practices you can implement that will increase your bottom line, make the renting process smoother, and potentially reduce insurance claims. None of them are difficult or complicated, but the return for your efforts will make them more than worthwhile.
Here are some of our top recommendations:
Fire Extinguishers. Keep a maintained fire extinguisher in every piece of equipment. It’s possible that the equipment may be used in remote areas away far from fire department service. You want to help your renter minimize damage if a fire breaks out. A ready fire extinguisher is especially important in equipment used to clear land. Large quantities of potentially flammable debris may become lodged into the engine compartment, causing ignition.
Label All Fluid Tanks. Ingestion claims happen when something is improperly absorbed into the machine. While REP does cover ingestion claims, it’s always better to try to avoid a claim before it occurs. To avoid potentially catastrophic damage, clearly label all tanks–gas, DEF, diesel, etc. This simple process will minimize the chances of a careless mistake.
Track your equipment. Nearly all new equipment is designed with tracking systems. However, its important to ensure all equipment has some tracking capability and that it works properly before renting it. It could prove invaluable during the recovery process in the event of a theft.
Article: “2 men arrested in multi-state heavy machinery theft ring, more arrests expected” by KPRC Click2Houston
Collect Certificates of Insurance (COIs). At a minimum, you’ll want to make sure that your renter has physical damage and liability coverage before they are permitted to rent equipment. Additionally, if customers transport the equipment to a job site, you’ll need them to prove they carry adequate auto liability insurance.
(As a dealer, you may not be an insurance specialist or have one on staff to evaluate COIs of potential customers. JT Bates Group has specialists who can complete that process for you. Contact us here for more information.)
The dangers of not collecting COIs or accepting inadequate ones are significant. Absorbing the costs of damages and replacement for improperly insured renters would be detrimental to your business. Alternatively, collecting damages means time spent away from work, expensive lawyer’s fees, and losing future business from that customer. Evaluating COIs on the front end takes a little effort, but it will be well worth it when you need to file a claim.
Vet renters. Collecting COIs is just one of the best practices a rental dealer needs to establish before allowing someone to rent equipment. Dealers must ask potential rentals relevant risk mitigation questions. It will help ensure the equipment is the best piece for the job and will be used correctly.
Stay tuned for more about vetting renters in an upcoming blog!
Expedite Recovery. It may seem like an obvious practice, but renters are sometimes slow to notify the dealer that they damaged the rental machine, especially if it’s in an inconvenient location. When this occurs, it inhibits the dealer from recovering the equipment in a timely manner.
Even if a piece of heavy equipment appears to be a total loss, it’s important to recover it quickly and remove it from the elements for a complete evaluation. Prolonged exposure could result in further damage and may affect the coverage and claim process.
There’s another practical reason for recovering the machinery quickly. The faster the equipment is recovered and a claim is filed, the sooner it will be repaired or replaced. Getting it back into the rental fleet means you’ll be able to rent it out again and maintain a steady flow of income.
Take pictures. This is an easy one. Take photographs of every piece of equipment before and after each rental. In the case of a catastrophic event, the exact damage will be clear. It also prevents confusion regarding exactly when any damage, even slight, occurred. Also, when it’s necessary to file a claim, retrieving the pictures for proof to provide to the insurance adjuster will be easy.
If you have any more questions about best practices or insurance for equipment dealers or renters, please don’t hesitate to contact us!
Contact Us: Website | Email: info@jtbatesgroup.com | Phone: (877) 595-7850