Once you’ve got the equipment, you need to protect it.
“You have to insure equipment that you’ve borrowed money against. Once your equipment is free and clear, it’s your choice whether you want to insure it,” says Tierson Boutte of Atlanta’s Boutte Tree.
Boutte recommends insuring key pieces of equipment, those that would be detrimental to the business if they were out of service due to an accident, at replacement value, even if the equipment itself isn’t worth that.
While he’s a big advocate of shopping between different lenders, Boutte says that, when it comes to insurance, he’s a proponent of developing a long-term relationship with an insurer. “I urge people to use a large insurance broker that has a staff who understands claim management,” he explains. “I believe in treating your insurer as sort of a business partner.”
Chippers Inc. owner Mundy Wilson Piper says she maintains a company-wide auto and equipment insurance policy through a single insurance agency that also finds carriers for her liability and worker’s comp insurances.
While there are different insurers involved, having a single agent (with whom her company has a longstanding relationship) that can help her shop these policies has proved very helpful, says Piper.
“He does his due diligence and homework to find us the best rates and fits for what we do and who we are,” she explains. Relying on this expertise is both easier and more effective than trying to compare different insurance policies on your own, she notes.
In addition, Piper recommends doing certain things to help keep your equipment insurance costs down. For example, she says, “We are very diligent about making sure that we take equipment and vehicles off our insurance seasonally. Things that are parked for the winter, for instance, are pulled off of our policies.” Another great way to save on insurance costs is to work safely.
“Overall, our company safety record is excellent,” Piper says, “which gives us a huge discount on our worker’s comp policy, and that translates into courtesy discounts on our other insurance policies.
“So, being safe is a profit center for us.”