Renting out a venue or property can be a great way to generate residual income once the property or equipment has been paid off. In fact, many people have made fortunes off of simply renting out pieces of property that may be too expensive to purchase outright for others. Unfortunately, there is a major risk associated with this business model: damage, injuries, and even death.
Liability Insurance is a Must
When it comes to insurance needs for any type of business, liability insurance is a must. Liability insurance covers injuries that occur on your business’ property, but it may also cover injuries that occur due to equipment malfunctions and mishaps after you've rented said equipment out. For example, liability insurance may cover someone slipping and falling, and injuring themselves, on a dance floor at your rented wedding venue, but it may also cover someone who becomes injured while using a rented chainsaw.
Keeping Property Updated
A major piece of the puzzle when renting out property is to keep it updated. This can mean ensuring that your home is clean if it is used for events, but it can also mean performing routine maintenance on machines that you rent out.
Remember, it's your responsibility as a business owner to keep things clean, safe, and in working order, regardless of the type of property you rent. Liability insurance is available to protect you in the event of an accident, but it may not help if it can be proven that you have been willfully negligent in keeping up with routine maintenance.
Make Sure Customers Understand All Agreements
Another important factor in liability insurance matters is that you ensure that all clients read, understand, and sign all agreements. For example, you may choose to have a client inspect a piece of property in-person before renting it to him or her. Failing to do so may lead to a legal argument regarding whether the property was delivered and used as expected.
For instance, if you rent out a piece of property for a convention event, and the client has not inspected it beforehand, he or she could claim that it was not functioning as promised after the event . This can then result in a lawsuit. Liability insurance may cover you in this case, but it can become a very long and drawn-out process. To avoid such issues, make sure that each client has a chance to inspect property being rented and agrees to a written contract.
Contact Poms & Associates to Find Out Whether Your Liability Insurance Needs Are Covered
Poms & Associates provides independent liability insurance brokers to assist business owners in finding the right coverage options to protect not only their employees, but also their customers. If you're unclear on your current liability insurance needs, or if you want to start a rental business and you're looking for coverage, we can help. Contact our team of experts through our convenient contact us today!
Andrew Rusnak is an author who writes on topics that include liability insurance and risk control.