When you have secured the finances to start your equipment rental business, experts say the next step is to protect those assets against fire, burglary and injury or loss of income. When you're in the market for business insurance, take an active role in choosing your coverage and take stock of the loss protection you need.

Much like buying a new car, insurance shopping entails taking the time to look for a reputable agent backed by a financially strong company, says Ann Swiggum, product manager for Northland Insurance, St. Paul, Minn. The company has been in business for more than 50 years and features a “construction equipment rental program” for rental centers, equipment dealers and crane operators.

To determine how your insurance company measures up, Swiggum suggests checking the annual A.M. Best Ratings, which is recognized worldwide as the benchmark for assessing an insurance company's financials. It is easily accessible online at www.ambest.com.

“Always look for a financially strong company because a lot of companies have gone out of business in recent years,” she says. “[When you find an insurance company], they should be rated A or higher, which means financial strength and stability. And look for an agent who understands your business. They should ideally expect the agent to visit them every six months.”

Swiggum says your agent must be able to customize your insurance package according to your business needs, have a reputation for hand-ling claims promptly and be willing to explain your policy's exclusions and conditions. Once you select coverage, she says you expect to receive your policy in the mail within 45 days of the effective date.

Basic care package

When your business grows, Swiggum says, you need to secure a basic package that includes general liability coverage, automobile insurance and inland marine coverage for your equipment.

“They definitely need general liability because if someone, for example, injures themselves on the premises during a product demonstration, it would cover them,” she says. “Inland marine coverage is also important for rental center owners because with it, they can re-rent equipment if their own equipment is down, damaged or stolen.”

To protect your equipment against theft, obtain an equipment floater policy with a “replacement cost endorsement.” According to Jim Bankson, executive vice president of USI Rental Specialties in Irvine, Calif., a replacement cost endorsement offers the broadest coverage and will pay you the equipment's current value.

A company that provides loss control services is also highly recommended. Typically offered as a free service to the insured, an engineer will personally inspect your facility and recommend safety measures, such as safe guards for equipment or special containers for dirty rags, that in the long-term will help reduce your premium costs.