Like many organizations, your production company may rent or lease equipment from time to time. There are many reasons why production companies rent equipment. Perhaps you are planning a short term film and need to rent lights or other equipment. Or your management company is sponsoring a concert, and you need to rent a sound system.
It is important to have an understanding of who is responsible for the rented equipment, and that your understanding is consistent with the written rental agreement. Not all rental agreements are the same. Some rental agreements will include property damage insurance as part of the rental fee. Other rental agreements may require the nonprofit to be responsible for all damage. And finally, some rental agreements may require you to pay a deductible if there is damage. This can be very confusing especially if you are leasing or renting a high value item.
There are many important things to remember when considering a rental agreement:
1. Leasing companies come in many varieties including banks, brokers, equipment specialists, independents, and companies of all sizes. Each has different levels of flexibility and requirements.
2. Understand what the rental/lease agreement says regarding repairs, maintenance, and upgrades. This applies more to long term leases rather than short term leases.
3. It may be in your best interest to insure the equipment separately. This may be more cost effective depending on how the agreement is written.
Leased or Rented Equipment Insurance
• Coverage is available for a wide variety of property, during production or while in your care, custody and control.
• Property located on or off your premises.
• Property in transit.
• Coverage generally can be provided for risk of direct physical loss.
The bottom line is, when you are deciding to lease equipment, be certain you are aware of all costs involved with the transaction. Then, balance the costs against the benefits to make the appropriate choice for you and your organization.