How to Get Party Rental Business Insured

Getting a party rental business insured is a prerequisite to securing a strong, successful long-term business, and it comes before attracting customers to your rental business.

Indeed, insurance matters because you never know – when equipment is damaged, or someone is hurt. You have to be ready beforehand for any liability.

Primarily, insurance allows businesses to secure their financial stability at the time of unexpected events such as accidents, theft, or injuries. More than anything, insurance coverage gives you peace of mind so that you can operate with greater flexibility.

On the other hand, having no insurance puts pressure on your finances. It produces uneasy feelings because of the surface you may lose your valuable equipment or get sued over an accident or injuries caused by your party rental business.

Not all countries are equal in terms of insurance policies, and some of the under-regulated countries do not offer insurance coverage to protect business property and equipment. So, if your party rental business is located in one of those countries, you need to take the matter into your hands. In other words, you need to maintain and protect your equipment and inventory yourself. We have already shared some good tips about keeping your party rental equipment here.

However, if you are in a developed nation, you have a more prominent chance to get your party rental business insured. Unfortunately, despite the greater possibilities, some companies in developed countries are also facing damages because they are not guaranteed.

For example, AmTrust Financial estimated that 75% of businesses in the United States are underinsured by 40% or more.

s are underinsured by 40% or more

Businesses are underinsured for the following three reasons:

– Cost of Insurance
– Do not understand the value of insurances
I- Not sure which coverage they need

If you have been long enough in the industry, you do not need to explain the importance of insurance, and you may already know it. However, those new to the industry and just getting their feet wet can get great value from these guidelines.

1. Understanding the Role of Insurance

Without knowing the value of something, we do not like to pay for anything. That is introductory human psychology. For example, when I first started driving a vehicle, I thought insurance was unnecessary. But a single fender-bender accident proved me wrong. If I hadn’t had an insurance policy at that time, I could have bankrupted myself by trying to pay for the damages of both vehicles (mine and the other driver’s). On top of that, I would have faced severe penalties from law enforcement for driving without insurance coverage.

This example is also applicable to your party rental business. If the equipment you rent out causes injuries, you may be held accountable for the damages. Think of a situation where faulty rental equipment electrocutes an inexperienced renter. Instances as such can lead to heavy financial compensation, produce hefty fines, and a bad reputation for your business, not to mention how much losses you would face from the equipment or property damage.

Long story short, you need to understand the value of insurance policies and understand why you need them to maintain your business in financial stability. Otherwise, you may not have an intention to get one.

2. Evaluating a Policy for Your Rental Business


Evaluating a Policy for Your Rental Business


Party rental businesses can use primarily two types of insurance:


Full-coverage (Business Owner’s Policy) and General Liability Insurance.

Business Owner’s Policy (BOP) vs General Liability Insurance:

The first option covers everything, starting from damaged supplies to user injuries. However, general liability covers only the damages and losses users get by using your equipment, furnishings, or services. Party Rental Businesses are required to have at least general liability insurance that covers the following:


Legal defense and judgment. For example, if an obese adult over the allowed weight limit uses an inflatable slide contrary to terms of use and fractures their bone, you may face a legal battle over the accident. Although the lawsuit will be settled in your favor (since you already warned renters that such weight is not allowed), you still need general liability insurance to cover your legal fees.

Medical Payments and Bodily Injuries. Sometimes workplace accidents do happen despite the strict safety guidelines. For example, if one of your renters falls in your warehouse, you may call an ambulance or take them to a nearby medical center. Medical bills are not cheap, so you need to cover the expenses of injured individuals.

Medical Payments and Bodily Injuries


Property damage. Property damage refers to the renters’ side’s equipment or assets damages. Even if you know how to maintain rental equipment – these damages are inevitable anytime during bookings. For instance, if your rental equipment is damaged by fire, tips a part of a wall over, breaks windows, or does anything damaging to other’s property, you are obliged to pay for it. Also, it would help if you kept in mind that most venues will not work with party rental businesses that do not offer general liability insurance.

3. Connecting the Dots of Cost and Benefits

Cost and benefit analysis will help you to determine what type of insurance is needed for your rental business. If your party rental equipment is not worth the monthly insurance payments, you may get general liability insurance; However, if your party rental business possesses high-cost equipment and supplies that you can’t afford to lose, then you need full coverage insurance.


A simple formula to do cost and benefit analysis:

– List all of your valuable equipment and supplies and attach a value to each. 

– Determine the items that need to be included in the insurance plan. There is no need to add your old equipment into the bundle if they are needed to be replaced anyway.

– Project the damages you may get when you do not have insurance and compare it against the monthly insurance payments. This way, you will know which route is costlier.


All businesses like saving money, and therefore, some companies try to cut their expenses by not purchasing insurance coverage unless required. That mindset is excellent if you can afford to lose your equipment in unexpected events. But there are some mandatory insurance coverages you are required to have.

You have to purchase them to operate as a business legally. For example, some states require you to have general liability insurance to protect the well-being of your employees, customers, or other people who might get affected by your rental business.

Non-compliance with insurance requirements can lead to severe fines and business suspensions. So, to protect yourself from such unfavorable incidents, you should learn your state’s insurance requirements. Knowing that will guide you in the right direction during insurance shopping.

4. Choosing the Suitable Insurance for Party Rental Business

We recommend shopping around before choosing an insurance provider. The process can be overwhelming because there are various types of insurance depending on your locations, services you offer, and state regulations.

Make sure that the insurance company that you are interested in offers the following types of coverages:

General Liability Insurance: As discussed, general liability insurance covers third-party damages and injuries such as bodily injuries, property damage, copyright infringement, and defamation that you may face while operating your party rental business. Usually, liability insurance costs about $42 per month or $500 annually for $1 million-dollar general liability coverage.

Business Owner’s Policy (BOP): This is one of the popular forms of insurance as it is a bundled version of all insurance coverages. It includes both general liability insurance and commercial property insurance at a discount price. However, BOP insurance costs are higher than general liability insurance.

According to the Insureon agency, the average cost of a business owner’s policy is $99 per month or $1,191 annually.

Small Business BOP policy limit Stats



Overall, 88% of BOP customers select a policy with coverage limits up to $1 or $2 million, while 10% select $2-$4 million limits. and the remaining chooses policy with limits far less than those. Unlike general liability insurance, BOP covers damages and injuries that may arise at both the consumer and owner side of the business. For example, if one of the guests knocks down your decorative furnishings during a party and receives an injury. The insurance will pay for the medical expenses of that individual as well as for your damaged rental furnishings.   

Commercial Property Insurance: It usually comes as part of a BOP. It pays to replace or repair damaged, stolen, or lost business property such as equipment, furnishings, inventory, and damages to office buildings and workspace.   

Employer’s Liability Insurance. This coverage is especially important if you have employees (other than family members) who transport and install/disassemble party equipment and furnishings. Accidents can happen, so do employment lawsuits. So, it is better to be secured with an employer’s liability insurance.

Business Interruption Insurance: It replaces the lost income that occurs when you can’t operate during an unforeseen event. If your business is halted due to a storm or fire, the insurance pays for the lost income for a specific period as agreed in the contract. Some Business Interruption Insurances also cover Coronavirus-related limitations. But you have to make sure which conditions are covered under this insurance plan.

Commercial Auto Insurance: Most party rental businesses own vehicles to transport rental equipment and supplies. If you are one of those companies, we highly recommend adding commercial auto insurance into your insurance plan to cover the medical expenses, legal bills, and property damage that may arise during a company vehicle accident. 

5. Get in Touch with a Reliable Insurance Provider or Agent

When we say good insurance agent, we mean honest, helpful, and ethical. Insurance brokers and agents can help you to choose suitable insurance for your party rental business as they may have gained enough experience over the years. However, it would help if you were extra careful when dealing with agents and brokers, as they make the majority of their money from commissions working as independent contractors. That means some of them may use tricky strategies to get you to sign the papers and forget you once they get their share from that deal. 

Get in Touch with a Reliable Insurance Provider or Agent


To avoid unethical insurance brokers and agents, we recommend you read the insurance plan details attentively and discuss the sections that do not make sense or seem questionable. Concisely, do not be shy to ask questions because clarity may save you from unexpected hidden fees and other unfavorable contractual conditions.

6. How to Find a Good Party Rental Bussiness Policy Online

Did you know that websites help you select the most affordable insurance plans for your party rental business? Those websites compare the prices of several hundred companies and rank them based on their pricing.

How to Compare and Find a Suitable Party Rental Insurance:


– Compare the Market is an online platform that allows business owners to get quotes for their business insurance based on the company’s size and needs. According to the company, they only compare the prices of all well-known insurance providers and offer the best ones.

– Money Super Market is another online website that helps business owners to select the cheapest insurance. However, this platform is primarily useful for UK-based businesses.

– Go Compare is another business insurance comparison website that simplifies the insurance shopping process. Before displaying the list of insurance providers with their prices, they require you to submit some information about your party rental business to match it with only the suitable ones.

However, although comparison sites are a good way to start your searches, they can be deceiving too. For example, a cheap price does not always translate to high quality. That means you need to do your research and hand-select business insurance providers for your party rental business.

How to Evaluate the Credibility of Your Insurance Provider:


Evaluate the Credibility of Your Insurance Provider


– Reading online reviews about the provider. The general public knows the insurance companies better than the paid reviewers.

– Assess the financial resources and future goals of the company. In almost all cases, we recommend choosing the established and financially stable insurance companies over the new and unstable ones. Because established companies are in a position to offer comparatively affordable plans & pricing. Thus, they are able to process claims smoothly.

7. Finalize Your Rental Business Insurance Policy

Finally, after all the research, comparisons, and background checks, it is time to seal the deal. Before finalizing, you have to review everything we mentioned in this text. Then, you need to fill out the application forms attentively and ask questions during the process.

Finalize Your Rental Business Insurance Policy

Some businesses put a checkmark on the auto-renewal section. But some specialists do not recommend selecting the auto-renewal option as it can limit your chances of switching to better insurance providers over time. Insurance policies change regularly so you need to keep updating your insurance policies to go with the trends of the time.

Important Takeaways:


Here are the primary takeaways from this article:

– Learn the value and importance of business insurance.

– Determine which type the business insurance is suitable for your party rental business. If you afford to lose your equipment and supplies, or your rental equipment is not worth the monthly insurance payments, you may just get the required business insurance to operate legally. Mostly, the government requires businesses to have public liability insurance, professional indemnity (PI), and Employer’s liability insurance (if your business has employees other than family members).

– Make people aware of your insurance policy using your booking website. A party rental equipment software like Reservety helps you achieve that goal.

– Research insurance companies and make sure that one you are trying to get offers general liability insurance, commercial property insurance, business interruption insurance, commercial vehicle insurance, or Business Owner’s Policy as a bundle

– Try to work with ethical and honest insurance brokers and agents

– Use insurance price comparison websites to select the most affordable ones. However, do your research too. Usually, general liability insurance costs $42 per month or $500 annually per $1 million coverage, while the average cost of a Business Owner’s Policy is $99 per month or $1,191 per year for $1-2 million coverage limits.

– Lastly, before signing up for a policy make sure to read the terms, conditions, and fine lines critical to ensure the validity of your policy. It is one of the important aspects to keep your rental business productive.

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