Liability Insurance for Construction Equipment

Definition of Liability Insurance

Liability insurance refers to the obligation to compensate for damage to the property of others that you have caused. In a first step, the insurer checks whether the claims made against the insured are justified. For unjustified claims, liability insurance also covers potential legal and court costs to defend the policyholder (legal protection function). If the claims are justified and a claim occurs, liability insurance covers the claims up to the coverage limit specified in the insurance contract.

Is there liability insurance when renting construction equipment?

Since most construction equipment is not subject to mandatory insurance laws, there is typically no liability insurance included. If damage occurs during the use of rented construction equipment—not to the machine itself, but to third parties—the renter is initially liable. However, renters can often add this risk to their operating liability insurance.

Also important to note: While a construction all-risks insurance policy can cover work performed during construction through to project completion, construction equipment used on the job site is not included in such coverage – for that, you would need separate equipment insurance.

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Equipment Insurance – Practical Applications

Equipment breakage insurance (or simply equipment insurance) against unforeseen damage to machines is typically provided by the rental company for rented construction equipment. A corresponding insurance amount is charged to the customer proportionally along with the rental costs. However, equipment insurance excludes vehicles used exclusively for commercial goods transport on public roads or passenger transport, such as trucks or buses.

What insurance does klarx provide for rented construction equipment?

When you rent construction equipment from klarx, our Terms and Conditions apply. According to these, the renter is generally liable for damage to rented construction equipment (equipment breakage) under standard liability rules. It is important that any loss or damage to rental equipment must be reported to us in writing immediately.

As a renter with klarx, you have the option to limit this liability by paying a fee to reduce it to a specific deductible amount. If such a liability limitation agreement is made, you will only need to pay a fixed deductible if damage to rented construction equipment occurs due to negligent conduct on your part. The amount depends on the list value of the machine. For more information on liability for misuse, mishandling, overloading, intentional acts, gross negligence, or theft, you can refer to our Terms and Conditions. If no liability limitation is agreed with us, you as the renter must obtain your own insurance. However, a liability limitation agreed between the renter and klarx does not cover damage to third parties – this is where (operating) liability insurance comes in.