Short answer
Rented equipment insurance is what a rental company is asking about when it wants proof its gear is covered while you have it. On many business owners policies, rented and borrowed equipment can fall under a tools and equipment endorsement. That coverage usually applies only up to the endorsement’s limit, and often only if the rental company is added as loss payee.
Your regular business personal property limit is usually built for your office, not for gear in the field. Tell your agent the rental value and the rental company’s name before the equipment ships. Whether a policy responds depends on its wording and the facts.
Three limits that people mix up
A business owners policy can carry three different numbers that all sound like “equipment coverage.” Each one answers a different question.
Business personal property covers desks, computers and contents at your listed office. Small firms often carry a low number here because the office is small.
The off-premises extension covers property temporarily away from the office. Some forms cap this per item, sometimes at an amount far below a scanner’s value. Our article on business property in storage insurance explains how that limit works during a move.
Tools and equipment coverage, sometimes called contractors equipment or an equipment floater, is built for gear that travels to job sites. Scanners, total stations and GPS units usually belong here. Our article on inland marine insurance for interior designers shows how this kind of coverage works for property on the move.
Owned equipment: blanket or scheduled
A blanket limit is one total for all covered equipment in a single loss. If you own two scanners and the blanket is lower than their combined value, a theft of both can leave a gap.
Scheduling lists each item with its value and, ideally, its serial number. High-value gear is usually scheduled, because the policy then reflects what each item is worth.
Age and valuation also matter. Some forms pay replacement cost only for equipment under a certain age and actual cash value after that. Ask your agent how your form values older gear. Our article on insuring a LiDAR scanner covers owned equipment in more detail.
Rented equipment and what the rental company wants
Many equipment endorsements extend to equipment you lease, rent or borrow while it is in your care. The limit still has to be high enough for the rented value, so check the number before you sign.
Rental companies usually want to be named as loss payee on the equipment coverage, so a claim payment includes them. Being listed as certificate holder alone generally doesn’t do that. Our article on certificate holder versus additional insured explains the difference. Our article on mortgagee, loss payee and force-placed coverage covers the same wording for lenders.
Two other points deserve attention:
- Some firms rent only a few weeks a year, so ask whether a standing rented-equipment limit or a per-rental addition costs less.
- Rental agreements may make you responsible for the rental company’s lost rental income while the gear is replaced, so read that clause.
Where the new computer goes
A workstation that stays in the office is usually business personal property. The office property limit has to cover it, and a small office limit may fall short of a high-end machine.
A laptop or tablet used mainly to run the scanner in the field may fit the equipment coverage instead. Ask your agent which category applies, because the answer decides which limit pays. Our general and property liability page covers how a business owners policy is built.
Buying new gear mid-year
Some equipment endorsements cover newly bought equipment automatically for a short window, often 30 to 60 days, and up to a cap. A very expensive new scanner can exceed that cap on day one.
Tell your agent before or right after the purchase, and send the invoice. That lets the insurer schedule the item before the automatic window runs out. Terms vary by policy, so check yours.
How to move fast when the rental is next week
Send your agent a complete package on the first day. A short list saves time:
- The rental company’s name and address
- The value they require
- Their certificate wording
- The rental dates
- A list of owned gear with values and serial numbers
Midterm changes usually need the insurer’s approval and an endorsement. Same-day turnaround is possible, but it isn’t guaranteed. Our article on E&O insurance for reality capture and progress monitoring covers the liability side of scanning work.
What we see at Hardcover
A small reality capture firm that owns two laser scanners asked for help when a rental company required coverage on gear it was about to rent. The firm’s business owners policy already had an equipment endorsement that extends to rented equipment. The blanket limit was lower than the value of the scanners it already owned, and the office property limit was lower than the cost of one new workstation.
We asked the insurer for endorsements to schedule the owned scanners, raise the limit for rented gear, add the rental company as loss payee and increase office property. The outcome is pending.
This situation is common for small firms that grow into bigger jobs. The policy often has the right coverage type, but the limits were set for a smaller operation.
Questions to ask your agent
- What is my business personal property limit, and does my off-premises coverage have a per-item cap?
- Do I have a tools and equipment endorsement, and is it blanket or scheduled?
- Does it cover rented and borrowed equipment, and up to what amount?
- Can the rental company be added as loss payee, and how fast?
- How long am I covered on newly bought equipment, and up to what amount?
Related questions
Does my business owners policy cover rented equipment?
It can, if it has an equipment endorsement that includes rented or borrowed equipment. The limit and wording decide how much.
What does it mean to be a loss payee?
The rental company is named so a claim payment for its equipment includes it. A certificate alone doesn’t do this.
Is a laser scanner business personal property?
On many policies, field equipment fits better under tools and equipment coverage, which is built for gear away from the office.
What happens if I buy a new scanner mid-year?
Some policies cover new equipment for a short time, up to a cap. Tell your agent right away.
General education, not legal advice. Hardcover is an insurance agency, not a law firm.