In most liability claims
there is the allegation of improper maintenance of the equipment. A
well managed equipment maintenance program is the most important
feature we look for in underwriting the risk. ARA Insurance Services
sells an equipment maintenance tagging system at cost. The system
helps the rental dealer document his maintenance program.
Age of
Equipment
While well-maintained,
older equipment may remain serviceable it should be remembered that
the latest safety devices may not be available. In addition, there
is a greater likelihood that the manufacturer is out-of-business.
The risk is increased with older equipment.
Documentation
A good system of
documentation of maintenance and rentals is critical to defend
lawsuits. Two forms of identification are necessary. There are many
very good computerized systems now available. I.D. signs are
available free of charge from us.
Rental
Contract
A copy of the rental
contract is required to be submitted along with the application. We
review the contract for specific hold harmless and indemnity
clauses. There are certain areas, such as the refusal of safety
rails on scaffolding, where the customer needs to sign off on the
contract. The ARA has a Rental Contract Manual which is available to
members.
Knowledge of Renter
The more a rental
operation deals with known customers the lower the risk. Not only
does the rental dealer understand the capabilities of the renter
better, but the risk of conversion is minimized.
Employee Training
Employee training is
critical to the success of the rental operation. This is complicated
by the fact that equipment is seasonal in many areas of the country.
Customer Training
The rental dealer needs
procedures to ensure that the customer can properly and safely
operate the equipment. Often this takes the form of demonstrations
by the counter worker, but may include handouts and in rare cases
video training. It is best that the customer signs off on the rental
contract that proper instruction was received.
PROPERTY
Fire
The risk of fire is
always a concern. The maintenance shop, with flammable liquids, oily
rags and parts cleaning should be inspected for housekeeping and
proper storage procedures.
Premises Security
Building and yard
security is critical. Rental equipment is a target due to its high
value and ease of resale. Review fencing and car barriers (which
protect against the thief that drives a vehicle into the building as
a smash and grab tactic). Alarm systems are important.
Conversion
The rental operation
needs a good system of checking identification. Some dealers have
installed photo machines.
Equipment Security
Much of the equipment is
stolen from the jobsite. The rental operation needs confidence in
the security of the contractor.
Tent
Installation
Wind damage to tents is a
major cause of loss. A special supplement was developed to help
identify the better risk. A well trained installation crew is the
single most important element.
WORKERS'
COMP
Management experience,
operations, loss experience, employee hiring and training procedures
are all critical to a good risk.
AUTOMOBILE
Driver age, experience and driving record are all important.
Vehicle type, usage and maintenance are important.
GARAGEKEEPERS
A good understanding of the operations and the expertise of the
employees is important.
