Starting a rental company, what kind of insurance and where? Canada.?

Question

I am looking to start a rental company for film equipment. However I am not sure what kind of insurance I need to protect my self against fraud(Most daily rental packages are worth over $10,000)

Does anyone know what kind of insurance will protect me against fraud, and where I can get it?

Thanks!

Answer 1

You can purchase a Commercial policy that contains a Property Floater to cover rental to Third Parties, however a standard exclusion under any policy is loss caused "by any dishonest or criminal act on the part of the Insured, any other party of interest, agents of the Insured, or any person to whom the property may be entrusted (except for bailees for hire)." People who are renting the film equipment would be considered "...any person to whom the property may be entrusted...". Some policy wordings will say "...by misappropriation, secretion, conversion, infidelity or any dishonest act on the part of the Insured or any other party of interest, employees or agents of the Insured, or any person to whom the property may be entrusted (except bailees for hire);" which pretty much says the same thing. The only way you can protect yourself in this case is to try and find a broker who can negotiate with an insurer to have the portion of the exclusion that says "...or any person to whom the property may be entrusted..." removed, or to endorse the policy to include coverage for criminal or dishonest acts by people renting the property. This will be tricky even for an experienced broker. You should be prepared for the fact that if they can find an insurer willing to do this they  insurer will require an additional premium for this accomodation, which may be quite substantial