General - December 19, 2019
Do you lease equipment? Here’s what you need to know
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In the creative sector, devices are the tools of your trade; without them, there is no business. However, laptops, mobile phones and video production accessories don’t come cheap. Therefore, many agencies tend to lease technology instead of buying it.

Obviously, you save on the upfront charge, and only pay for what you require in the business. However, leasing companies do not always wear a halo of good intent – especially when it comes to insurance.

It’s vital you protect the equipment you use, but beware of leasing companies that aren’t transparent about whether insurance is included, or who is paying for it. Read on to learn about the issues we’ve seen in the sector:

Deceptive salesmanship

We know how it works: a leasing company pitches to you, claiming to bring X or Y to the table. It might sound great on paper, yet there’s a chance they’ve slipped an insurance plan in with the price, through the small-print of your contract, without saying a thing…

The insurance cover won’t necessarily be very good. Instead of adding value to your agreement, it’s likely to inflate the price of the leasing package without lending the close, specific guarantees of a specialist insurer.

Lack of adequate cover

When the worst happens, it’s hard to forecast how far the impact can spread. Business interruption protection does exactly what it says i.e. meeting the costs of a loss in revenue, as well as incurred expenses, that stems from an accident or incident.

Leasing firms, however, tend to leave it out of insurance plans. They focus instead on the bare bones of a crisis, such as physical defects within the hardware. This isn’t good enough when facing the manifold permutations cyber damage can take.

Often, clients find business interruption to be the major detriment on their cashflow until everything if fixed or thoroughly investigated. It’s just not worth the risk choosing an insurance deal that won’t protect against a temporary crisis within the digital earning model.

Policies can cancel each other out

There’s also the possibility of having no cover at all in the event that you take out insurance unaware of policies included in your lease. For example, two types of insurance can exist: both are implemented on the condition that there is no other policy at all. But because one cannot activate without the other being erased, nothing gets done! This is a nightmare and will slow down any remedial action.

So, when leasing new equipment, we recommend you speak to your broker or insurer before you move forward with the agreement. They should be able to add the equipment to your existing insurance package for a fraction of the price.

All that is required is that you provide evidence of your insurance to the leasing company and they will cancel their insurance element, saving you hundreds of pounds over the lifetime of the lease. This is often just a quick and easy call for the broker to do.


Photo by Christopher Gower on Unsplash

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