Utility trailers are a hot rental commodity – even more so since the COVID pandemic and all those DIY projects . If you have spare or stagnant inventory , renting it out can generate revenue . However , there are potential legal and logistical issues that need to be addressed . Here are five key considerations trailer dealers should note before offering rental trailers to the public :
SELF-INSURING IS A NO-NO Self-insuring your rental inventory is never a good idea . Consider the potential liability if someone gets injured while using it . Even if you can cover the cost of any damage to the trailer , you need to think about the possibility of being sued if there is an accident involving your renter . Make sure you have the right insurance coverage , especially if you are renting to the public . Consider getting a commercial policy to protect yourself and your assets .
SEPARATE THE BUSINESS Consider registering your rental business as an LLC separate from your current business . There may also be tax benefits in separating the two . Keep the two entities separate so that if there is a problem and your rental business is sued , the assets are in separate entities . Ensure that your website rental contracts and all other documentation align ; in other words , use the business name consistently .
RENTAL CONTRACTS Rental contracts and check-in and check-out forms are extremely important . The rental contract outlines terms and conditions of the rental , including what the renter agrees to do and not to do , and confirms that they have read and accepted the terms . Check-in and check-out forms , similar to when you rent a car , document the condition of the trailer before and after leaving your place of business . This helps to prevent disputes if any damage occurs . Ryan Keen and Pablo Fernandez of Big Rentals , a marketplace for rentals , emphasize the importance of taking pictures before and after every rental to provide proof , and obtaining signatures from both parties to acknowledge the terms . “ It lessens the questions of who did what and helps in claim situations ,” said Keen .
BE THOROUGH DURING THE CHECK-IN PROCESS Ask the renter for their intended use of the trailer and verify that the tow vehicle is rated for towing the load . If it is not , do not proceed with the rental . Allowing the renter to leave with your trailer on an unsuitable tow vehicle may open you up to liability for any incidents that may occur while the renter is towing your trailer .
During the check-in process , walk around the trailer with the renter and demonstrate how to connect the wiring and the hitch to their tow vehicle . It is important not to connect the trailer to the renter ’ s tow vehicle yourself ( for the renter ), as doing so may make you liable for any incidents that occur while the trailer is connected to their vehicle . After demonstrating , allow the renter to disconnect and reconnect these components to ensure they understand how it works .
MAINTENANCE RECORDS Tires are one of the most frequently reported causes of accidents . Inspect your tires before every rental . Check the tread , the pressure , and wear and tear . Perform regular rountine maintanance according to manufacturer ’ s recommendations on your trailer . Keen , of Big Trailers , also stresses the importance of maintenance records . “ Consistent and detailed maintenance records show that you have performed required maintenance and may help in case of a claim to disprove poor maintenance versus driver error .”
SUMMARY Renting your trailers can be a great source of additional revenue and an added-on feature to your business . Make sure you treat it as a business ; speak to someone about commercial insurance . Have your local attorney , who is familiar with vehicle rental law , review your rental contracts . Develop a process for a thorough walk through , each and every time . Following these guidelines can help you avoid potential legal and logistical issues in your rental business .
About MBA Insurance : Whether you have a large rental fleet or own one vehicle , MBA Insurance provides the best rental insurance solution to meet your rental business needs . MBA Insurance has been insuring rental businesses across the United States for more than 40 years . Learn more about our comprehensive and flexible solutions tailored to protect your rental vehicles and meet your business needs , visit : mbainsurance . net / utility-trailer-insurance . php
Be sure to visit MBA Insurance at the 2024 NATDA Trailer Show at Booth # 1743 .
30 NATDA Magazine www . natda . org