As a rental business owner, it is important to identify the areas in your business that may be vulnerable to loss. Managing business risk takes thought and planning, but it will help you reduce the number and severity of your insurance claims. Ultimately, you’ll reduce your insurance costs and improve your overall operation.
Here are a few strategies to mitigate your risk in the areas typically responsible for many rental business claims.
A Well-Documented Maintenance Program
A regular and well-documented equipment maintenance program is a necessity for rental businesses. Not only to provide your customers with properly running equipment, but also to document your maintenance activity. If a renter has a problem with your equipment, a well-documented maintenance program will prove that it was in the proper condition to be rented.
A Solid Rental Contract
Ask your agent or a representative from your insurance company to review your contract and then have it examined by an attorney to ensure that all necessary wording is included and that your business is properly protected. Make sure that your rental contract contains a “hold harmless” indemnification clause; an agreement that the renter cannot hold your company responsible for a loss.
Have your contract reviewed annually. One of the easiest ways to prevent claims is with a properly worded, signed rental contract. Obtain a signed contract for every rental transaction — no exceptions.
Theft Reduction Techniques
Secure and lock everything. Remove keys from equipment. Simple techniques, such as positioning larger pieces of equipment in a circular pattern, with smaller items inside the ring, are also effective in reducing theft. Other options include placing lights and fencing along the perimeter of your property, adding alarms and cameras or using anti-theft devices.
A Safe Work Environment
Spending the time and money to hire better employees, train employees, promote safety and provide a better work environment will help you run a more efficient rental business with fewer claims.
Hire smart through pre-employment background and motor vehicle checks, create a drug-free work environment, and offer a defensive driver training program.
Educate your employees about safety off the road and in your rental yard. Hold regular meetings with your staff on safety-related issues.
Rent the right equipment to the right customer. Maintain a strict policy of asking all customers how they will be using the rented equipment.
Ensure that proper safety and instructional decals are displayed prominently on your equipment. Supply your customers with both oral and written safety and operating instructions and the appropriate protective gear. In addition, have your customers sign a document that states they have been provided with information on the proper use of the equipment.
Make Prevention Your Policy
Do whatever is in your power to prevent insurance claims. Preventing losses and claims is one of the best ways to run a better business and to save on insurance.