Broker Check

If You Rent Equipment, A Certificate Is Not Enough

October 21, 2020

Recently a client who had rented a crane with an operator sent us a certificate as evidence of the renter's insurance. The certificate showed coverage for General Liability, Automobile Liability and Workers Compensation, and our client was named an additional insured "in accordance with policy provisions". However, the certificate did not assure us that our client was properly covered in the event of a claim.

In the first place, we did not get a copy of the rental agreement. Any rental or lease -for a building or premises, a vehicle or equipment - will have a written agreement, and its terms will state the obligations of each party. In addition to insurance requirements, this will include who is responsible in case of loss and may require one or both parties to indemnify the other. It may also require a waiver of subrogation in case of loss. Any of these terms may be at variance with a client's insurance.

In the second place, a certificate of insurance which merely lists policy dates and limits does not provide enough information about a policy's terms. If you are added as an additional insured, is the coverage broad enough? For example, most additional insured endorsments (and there are many in use, not all current editions) do not cover the additional insured's sole negligence even if required by contract. Other policy terms, such as waiver of subrogation and whether insurance is primary or excess cannot be found in an insurance certificate.

What should you do? First, read all contracts or agreements before signing, or have your attorney and/or insurance advisor read them. Second, insist that any certificate of insurance be accompanied by all endorsements - additional insured, waiver of subrogation, etc. - required in the contract.