# Insurance question for equipment dealers/users



## arbor pro (Mar 8, 2010)

Need some advice from guys who are 'side-line' equipment re-sellers (guys who buy and sell equipment on a regular basis and use some of that equipment themselves while re-selling other pieces of equipment immediately after making the purchase.

Just as soon as I buy a piece of equipment for my tree service (almost all of it from out-of-state), I typically turn right around and put it up for sale locally. While it's for sale, i use it in my daily tree care business. When it sells, I buy a replacement and repeat the process.

It's begun making me a few bucks on the side and I chatted with my insurance today about making sure I have sufficient liability coverage in place for selling equipment in such a manner. 

I was told that I would need to buy a dealer's coverage policy and pay a premium based on the total $ amount of the equipment I would sell annually. The question I had for my insurance company is, 'how do you distinguish between a piece of equipment that I sold specifically for resale and one that I've been using in my tree service'?

I'm not required by SD law to get a dealer's license unless I sell more than 4 units of titled equipment over a single year's time. So far, most of the equipment I sell is not titled - rather, it's sold by bill of sale only thus, it does not get counted towards the alotted number of units.

So, i asked the insurance company, 'if i use it for 2 weeks in my tree service and then sell it, why should I need to buy this extra coverage when my normal liability policy would cover such? Shouldn't it only apply to titled equipment that is not licensed nor sales tax paid for?' (In my state, you can simply transfer the title on vehicles that you intend to resell and, so long as you do not drive them on the public streets, you do not have to license them or pay sales tax). to me, these are the vehicles that should apply towards the 'dealers' insurance coverage and not the towable lifts, chippers, bobcats, etc that are not titled.

Anyhow, while my insurance company clarifies what types of sales require the additional insurance policy and which don't, i'm wondering if any of you do the same thing and how your states' laws and how your insurance applies? do you have to pay for additional insurance if you're not a full-blown licensed dealer?

Thanks,

AP


----------

