Safety Checkpoints for the Dealer's Rental Process - Rental
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Safety Checkpoints for the Dealer's Rental Process

Provided by Sentry Insurance

Article Date: 06-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.


Your customers' safety is your safety. Sentry Insurance, an AED Preferred Provider, offers important steps for protecting operators, the public, your rental fleet and your company.

To remain competitive in today's marketplace, many dealerships rely on other revenue-generating sources such as rental operations. Due to the high demand of renting versus purchasing equipment, renting has become a profit-generating staple for many dealerships.While renting can provide financial perks, it is important to consider the potential risks, like those illustrated in these examples:
  • A contractor self-loads and secures some equipment rented from your dealership, which breaks loose from the lowboy trailer while being transported to the site and injuring an oncoming driver
  • The operator of a rented skid-steer is killed when he exits the machinery with the bucket arms in the raised position
  • A retail customer is killed in a rollover of a compact excavator when heavy rain created unstable soil conditions
If your dealership provides rental operations, or is considering renting equipment, you should:
  • Establish and enforce rental qualifications
  • Document your rental agreements
  • Provide equipment demonstrations
  • Ensure safety during transportation
Your dealership's rental agreement should include several key statements, including a "hold harmless" clause, by which the customer agrees to not hold the dealership liable for injury or property damage resulting from their use of the machinery. This clause should further state their agreement to indemnify your dealership against any damage or loss resulting from their use of the machinery.Include an "arbitration clause" that specifies both the dealership and renter agree to arbitrate all claims of injury or property damage through a mutually-selected third-party arbitrator. This should allow allegations of negligence to be argued and settled in a more impartial setting than traditional litigation.Allow a space for the customer to describe the project the machinery will be used for and where the work will take place. This should be entered by the customer, or initialed by them if entered by a staff member. The dealer's rental agreement should also clearly restrict use of the equipment to the specifications in the operator's manual. This should include an acknowledgement to use all safety devices as intended - and to not remove or circumvent them.The agreement should contain a list of anticipated operators with an acknowledgement that those individuals are trained on safe operation of the machinery. Include a statement that no individuals other than those listed will be allowed to operate the machinery. Provide an acknowledgement space next to all critical statements in the agreement for your customer to initial or sign.In addition to a rental agreement, you should:
  • Obtain a copy of the customer's Certificate of Insurance (with liability limits of at least $500,000 and Inland Marine coverage at least equaling the value of the equipment) before releasing any piece of equipment from your dealership. Keep this copy in the rental transaction file.
  • Consider retaining a copy of the insurance certificate(s) for all long-term and regular clients so they don't have to repeatedly provide the same documents. This will reflect trust in your business relationship while streamlining the rental process for your customer.
  • Request to be listed as an Additional Insured on your customer's policy for all long-term rentals (in excess of seven days). In these cases, ensure a "10-day Notice of Cancellation" clause as part of the policy. This will ensure that you receive timely notification if the policy coverage is allowed to lapse.
  • Have all legally binding documents evaluated by legal counsel that specializes in commercial liability within your dealership's jurisdiction. If your legal counsel determines that aspects of your documents are not binding in your jurisdiction, consider adding an arbitration clause that requires any dispute of liability to be arbitrated by a mutually-selected third party.
Thorough documentation of your rental agreements can help defend your business against allegations of negligence.Provide Equipment Demonstrations Whether the equipment is being rented directly from your business location or delivered to a customer's premises, you should always provide an equipment demonstration.Your demonstration should include a review of all safety systems, devices, guarding and labeling as well as a run-through on how to operate the equipment. Be sure you provide the customer with the operator's manual. Most manufacturers offer a series of pamphlets or brochures that touch on these areas. Use these materials to supplement your demonstration.As part of this process, have your customer sign an Equipment Demonstration form that documents:
  • Their receipt of the operator's manual and their capability to operate the machinery within its guidelines. If you have provided any additional manufacturer pamphlets or brochures, include a confirmation that the customer has received and reviewed them.
  • Their acknowledgement that you demonstrated how to safely operate the equipment, and that the procedures are understood and will be followed.

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Article Categories:  Insurance  »  Rental