Legal Question in Business Law in Florida

Re: Protected by rental agreement

You can certainly protect yourself to some degree by adding a waiver, indemnity and hold harmless clause to your rental agreement.

I am currently writing a book on rental agreements for the American Rental Association, so I have most of the current research on the subject.

I would, however, also recommend taking a few other steps to protect yourself.

You would do well to set up a corporation or limited liability company ("LLC") for your business. Such entities offer very effective protection of your personal assets (called a "corporate shield" or "limited liability shield") from lawsuits filed by persons injured using rented equipment. In short, if a person is injured and files suit claiming damages for personal injuries (and associated damages - e.g., pain and suffering, loss of consortium, etc.), any recovery would be had solely against the assets (if any) in your company (and not against your personal assets) in most cases. Thus, you can limit your exposure to the assets, if any, actually held by your corporation.

In the business you describe, the risk of a multi-million dollar lawsuit is great (and, like it or not, an injury to a child is more likely to yield a large claim). So, creating a limited liability shield is more important for you than for most, and the cost is minimal - less than $1500 in most cases.

Also, if you don't already have public liability and property damage insurance, I would recommend you talk to your insurance provider at your early convenience, and obtain, at a minimum, liability coverage with limits of no less than $1 million.

I hope you find this information useful. Feel free to contact us if we can be of help.