Don’t set yourself up for hire and rental insurance failure
Published 03 November 2017
The hire and rental insurance landscape is a potential minefield for the unwary operator. Your insurance claim can be voided if you don’t have the right policy and if it doesn’t work with your hire rental agreement.
Failure to understand the wording in your own hire contract could have major consequences in the event of a claim, warns Gallagher’s Jamie Lansdown from the Products and Partnerships team.
“The best way to be sure you’re covered is top ask an experienced hire rental insurance broker to conduct a hire agreement review.”
Some of the potential pitfalls that can occur with hire agreements:
Using a boilerplate or downloaded hire agreement without getting legal advice.
Why it’s a bad risk: it may not be appropriate or enforceable in insurance terms for your operation.
The damage waiver in the hire agreement includes exclusions.
Why it’s a bad risk: you and/or the customer may be precluded from making any claim.
The agreement doesn’t specify who is responsible for a loss at any given time.
Why it’s a bad risk:if it’s not clear who’s at fault you may be unable to bring a claim.
Legally enforceable conditions of hire that make the hirer responsible for loss or damage.
Why it’s a bad risk: there’s no guarantee the customer is able to pay.
The hire agreement isn’t subject to any damage waiver, meaning responsibility defaults to the hirer.
Why it’s a bad risk:see above.
Some of the loopholes in hire and rental insurance policies:
Check that your policy covers the hirer for damage to your equipment (Extended Dry Cover) or you may have to try to recover costs from the customer.
Wording around damage waivers may not be compatible with Extended Dry Cover under your policy.
Are there exclusions for certain conditions, such as equipment stored unsecured out in the open?
The hire and rental market is complex; you may need add-ons to your policy to ensure you are completely covered.
Don’t buy hire and rental insurance based purely on price. You get what you pay for and you may be left exposed at claims time.
“Not all insurance policies offer the same cover,” says Lansdown. “It’s vital to know what an insurer will do in the event of a claim.”
Gallagher has been an insurance partner of the Hire and Rental Industry Association for more than 25 years. Together with the Association we developed HirePac insurance cover specifically for construction equipment and party and event hire businesses.
For personalised advice about your hire agreement and insurance needs, Gallagher has specialist brokers in your area. For more information go toinfo.ajg.com.au/hria
Alternatively please see our Complete Guide to Hire and Rental Insurance. You can download a copy here.