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Renting heavy equipment is a widespread trend among small companies and those who occasionally use a piece of equipment. Instead of buying large pieces of machinery or hiring an operator for equipment, the trend continues. In Australia, this exercise is known as dry fare.
If you own a dry rental business, you can be sure that the company using your machinery is liable for any damages associated with the equipment in question. Unfortunately, this does not always happen, and this belief can turn into a significant loss for the owner.
Why do I need a dry higher cover?
Although your goods are used for dry rent, there are variations where a standard business insurance policy cannot cover the loss when the goods were rented. These events include,
- Damage to both accidental and malicious
- Income protection
- Legal fees
- Theft is committed by a third party.
- Theft was committed by a rental company.
- There are more challenging scenarios where dry rent cover protects you from harm.
What is Dry Higher Insurance Cover?
A standard dry higher insurance policy will protect you from the above mentioned incidents. You need to be aware that dry rent coverage is very specific and detailed. The policy has some costs and limitations.
What is not included in the Dry Higher Insurance Policy?
Many exemptions may apply to your dry hire policy. You need to be aware of the details covered in your cover so work with a reputable insurance professional who can advance your policy. Possible exclusions and limitations include,
Theft of tools is done by the company that rented your equipment.
If there is evidence that you have not taken reasonable steps to ensure that the company servicing your goods is allowed to operate the equipment under the relevant legislation.
If you have not given the tenant enough instructions to operate the machinery.
Provide adequate instructions to the tenant to operate the machinery.
What are Dry Rent Agreements / Loss Waivers?
Sometimes a dry rental agreement is required to start an insurance cover. Agreements are in everyone's best interest because they describe the details of the transaction and the responsibilities of each party involved in the transaction. For the agreement to take effect, both parties must sign and agree to its terms.
A dry rental agreement states:
- Damage reduction, maintenance and safety conditions while the goods are in the hands of the tenant
- An insurance clause stating which party is responsible for providing insurance cover for rented equipment or devices.
- Details of training required to operate rental equipment safely
- Maintain a harmless provision that protects the owner of the goods from liability for damages while the machinery or tools are being used by and in the maintenance of the company that rented the goods.
- Damage waiver for dry rental equipment
- In some cases, the goods services company seeks a rebate as part of the dry rental agreement. This means that the company that hires the goods is not responsible for the loss, damage, or other misuse of the rental goods while remaining under its control.
Damage waivers can be difficult because they release tenants of damaged goods from liability for damage to their care.
In some cases, a loss waiver may prevent the insurer from having access to a subordinate, the legal right of the insurance company to receive damages from a third party that has resulted in the destruction or damage to your equipment or tools.
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Making sure your dry rental tools and equipment are properly insured is very important to your business. Furthermore, it is a complex process and difficult to understand at best.
If you are not sure if your cover is adequate or if you have other questions, please feel free to contact one of our insurance experts at Grace Insurance. We can answer your questions and review your insurance policy to make sure you and your company are safe from any damage..