Does Commercial Property Cover Leased Equipment?
Sometimes—commercial property may cover leased equipment as property of others, but limits and leases can require the item to be scheduled or the lessor named as loss payee.
Some property forms extend limited coverage to personal property of others in your custody, but the wording, limit, and covered causes matter. A lease can also make you responsible for insuring equipment at its replacement value or naming the owner as loss payee. Equipment used at multiple sites may need broader location coverage.
Read the property-of-others clause and compare its limit with the lease’s insurance requirements. Identify each item, owner, value, and location; check transit, breakdown, and theft terms. Ask the lessor and broker to reconcile who insures the item, who receives claim payment, and whether an inland-marine or equipment floater is needed.
