Commercial liability claim as third party

[manny4wd]

Jurisdiction

North Carolina

Hello,

I run a small business of construction equipment rental. Last year, I rented 2 pieces of equipment to a construction company. There is a signed contract as well as Certificate of Insurance listing my company as a Certificate Holder, this was sent by the renter's insurance agent.
This year on January, both pieces of equipment suffered significant damage due to negligence from the renter. They abandoned the jobsite and my equipment there, refuse to answer phone calls, emails and text messages.
I contacted local Sheriff's office to file a report and contacted their insurance to file a claim.
The insurance company proceeded to send an inspector or adjuster to verify damages and cost of repairs, which they did.

Now, the insurance company is telling me that they cannot do anything until the insured files a claim but he refuses to do so.
Do I need to sue the renter/insured for this? is small claims court capable of ordering the renter to file the claim?
I contacted a local law firm and was told that they would sue and charge me 33.33% of the total claim, but that leaves me with over $40,000.00 short to pay the repair bill and I cannot afford that.

Thank you for your time.

Manny

 

[army judge]

Do I need to sue the renter/insured for this?

Yes, suing the renter (responsible party) might prompt her/him/it to file a claim for the damaged equipment against the insurance carrier.

That said, a criminal complaint against the renter might be much more efficient.

Convicted felons are often required to recompense her/his victims as part of the penalty the convict must pay.

Another added benefit has the state collecting what is owed to the victims, saving you great angst, anguish, frustration, and money owed but unpaid.

I'm surprised that your rental contract failed to address the reality you're confronting with this derelict deadbeat.

Hertz Car Rental contracts, heck, all car rental contracts address the misfortune you're experiencing.

is small claims court capable of ordering the renter to file the claim?

No, a small claims judge is unable to mandate the "specific performance" about which you inquired.

 

[Zigner]

Hello,

I run a small business of construction equipment rental. Last year, I rented 2 pieces of equipment to a construction company. There is a signed contract as well as Certificate of Insurance listing my company as a Certificate Holder, this was sent by the renter's insurance agent.
This year on January, both pieces of equipment suffered significant damage due to negligence from the renter. They abandoned the jobsite and my equipment there, refuse to answer phone calls, emails and text messages.
I contacted local Sheriff's office to file a report and contacted their insurance to file a claim.
The insurance company proceeded to send an inspector or adjuster to verify damages and cost of repairs, which they did.

Now, the insurance company is telling me that they cannot do anything until the insured files a claim but he refuses to do so.
Do I need to sue the renter/insured for this? is small claims court capable of ordering the renter to file the claim?
I contacted a local law firm and was told that they would sue and charge me 33.33% of the total claim, but that leaves me with over $40,000.00 short to pay the repair bill and I cannot afford that.

Thank you for your time.

Manny

The damage you describe is likely not covered by the renter's insurance. Why don't you file a claim with your own insurance?

 

[manny4wd]

The damage you describe is likely not covered by the renter's insurance. Why don't you file a claim with your own insurance?

The damage is covered by their insurance, as well as the loss of revenue but, until he doesn't file a claim, the insurance company would not do anything for me.

 

[manny4wd]

Yes, suing the renter (responsible party) might prompt her/him/it to file a claim for the damaged equipment against the insurance carrier.

That said, a criminal complaint against the renter might be much more efficient.

Convicted felons are often required to recompense her/his victims as part of the penalty the convict must pay.

Another added benefit has the state collecting what is owed to the victims, saving you great angst, anguish, frustration, and money owed but unpaid.

I'm surprised that your rental contract failed to address the reality you're confronting with this derelict deadbeat.

Hertz Car Rental contracts, heck, all car rental contracts address the misfortune you're experiencing.



No, a small claims judge is unable to mandate the "specific performance" about which you inquired.

Yes, suing looks to be the best option to get him to file a claim but also it will cost me a lot of money that I dont have.
I have filed charges against the renter with the sheriff's office and are currently waiting for an update from them.

My rental agreement does in fact address this situations but, it costs a lot of money to enforce.

I was hoping there would be another way on which I can make his insurance to cover my damages

 

[adjusterjack]

This year on January, both pieces of equipment suffered significant damage due to negligence from the renter.

How? What kind of damage?

The insurance company proceeded to send an inspector or adjuster to verify damages and cost of repairs, which they did.

Now, the insurance company is telling me that they cannot do anything until the insured files a claim

That's right. They are not your insurance company. They have a duty to protect their own insured and get his side of the story.

Do I need to sue the renter/insured for this?

Yes.

is small claims court capable of ordering the renter to file the claim?

No. Not even big claims court could do that. Court only awards you money. Then it's up to you to collect it.

I contacted a local law firm and was told that they would sue and charge me 33.33% of the total claim, but that leaves me with over $40,000.00 short to pay the repair bill and I cannot afford that.

Why isn't your own insurance covering the damage?

Relying on the renter was foolish. Relying on any renter is foolish.

.
I have filed charges against the renter with the sheriff's office

No, you haven't "filed charges." People don't "file charges." That's up to the prosecutor. All you've done is report an incident which you believe to be a crime. It's up to the prosecutor to decide if it is a crime and whether to prosecute.

What article of your state's criminal code do you believe the renter violated?

PS:

Does your rental contract have an attorney fee provision? Something that says that loser pays the winner's attorney fees in the event of a lawsuit? If not, maybe you should consider updating your contract.

 

[manny4wd]

The damage you describe is likely not covered by the renter's insurance. Why don't you file a claim with your own insurance?

And I will claim it with my insurance if it comes to that but I'm trying to avoid the premium increase

 

[Zigner]

The damage is covered by their insurance, as well as the loss of revenue but, until he doesn't file a claim, the insurance company would not do anything for me.

I'm not sure how you can know that, since actual coverage and acceptance of financial responsibility isn't determined until a claim is filed.

@adjusterjack - what is your take on this? Am I wrong? (It's happened on occasion in the past.)

 

[adjusterjack]

And I will claim it with my insurance if it comes to that but I'm trying to avoid the premium increase

It has always amused me that people spend lots of money on insurance and then don't make claims because they are afraid of a rate increase. Which, in the case of $40,000 worth of damage, would be a pittance.

By the way, Manny, if your own insurance covers loss of income, your insurance company isn't going to pay for the amount of time you spend farting around with the other guy's insurance.

You need to get your own insurance involved, retrieve the equipment and get started on the repairs. That's when the clock starts running on any potential loss of income.

I'm not sure how you can know that, since actual coverage and acceptance of financial responsibility isn't determined until a claim is filed.

@adjusterjack - what is your take on this? Am I wrong? (It's happened on occasion in the past.)

You are correct. The insurance company has a duty to it's insured to get the insured's side of the story. However, some insurance companies put pressure on their insureds by suggesting that the claim can be denied and the policy cancelled for lack of cooperation.

As for what is covered, Manny hasn't responded to my question about how and what was damaged.

 

[zddoodah]

Do I need to sue the renter/insured for this?

It's been 5 months. I wouldn't wait any longer if I were you. Note that, if you/your company is actually named as an additional insured on the customer's insurance, then there is no reason for the insurer to deny your claim, and you would have a direct claim. Obviously, one would need to review the insurance documentation.

is small claims court capable of ordering the renter to file the claim?

If the damage is less than $10k (which your post suggests is not even close), you can sue in small claims court, but you won't get a court order for the customer to file a claim. You'll just get a judgment against the customer and possibly the insurer.

I contacted a local law firm and was told that they would sue and charge me 33.33% of the total claim, but that leaves me with over $40,000.00 short to pay the repair bill and I cannot afford that.

Well...lawyers don't work for free. I gather that the amount of the damage is $120,000 ($40k = 33.33% of $120k). Correct? How much is the equipment worth? What sort of equipment are we talking about here? In any event, you don't have to hire an attorney on contingency. You could pay an hourly fee. AND, assuming your rental contract was properly drafted, you should have the ability to recover attorneys' fees as part of your judgment against the customer. Also, do you have a personal guarantee?

I agree with the others that not filing a claim with your own insurance is foolish (to say the least).

By the way, if you're in the business of renting equipment that costs six figures but can't afford to sue to enforce your rights, then you're doing something very, very wrong and probably should think long and hard about whether you want to stay in the business.

I have filed charges against the renter with the sheriff's office and are currently waiting for an update from them.

That's not going to help you. Abandoning rented equipment on a job site isn't a crime.

 

[adjusterjack]

There is a signed contract as well as Certificate of Insurance listing my company as a Certificate Holder, this was sent by the renter's insurance agent.

Zddoodah makes a good point about the certificate.

Please upload a copy so I can examine it.