Is this insurance required since there is a bank note on the tractor? Is this a requirement like having full coverage on a vehicle since it is financed?
most banks will require physical damage insurance at least during the term of the note. They often provide it themselves, like Kubota did on my zero interest loan,
or you can buy it lots of places. Normally called an equipment floater, you can add coverage sometimes to your homeowners for everything but business use.
I guarantee your homeowners insurer will deny any claim arising out of business pursuits. And whoever told you gifts were ok...be careful. That's compensation...
I'm a retired insurance underwriter and used to teach these policies word by word to trainees. Really boring stuff, and what's most important is the liability end.
Be very careful about who is driving your equipment and whether onsite or off. Policies are pretty clear on this what they will pay for and what not. Usually if you go off premises, unless to another property you own, you need what historically has been called inland marine coverage. You can go anywhere with specified coverage, but always always watch the exclusions. Have your insurance agent clearly tell you what is NOT covered. And WHO is not covered. And WHERE.
I let my BIL drive my Kubota on my own land yesterday and I was fine. But would I let my friendly local fireman who runs a landscape business on the side borrow my tractor? no no no Not without lots of hold harmless agreements signed. And they don't always hold up. Say the guy you lended your tractor goes postal and goes on a ramming spree. Good luck...
Umbrella policies are excellent, have had a large one for almost forty years. But they have exclusions too and business pursuits is usually one of them.
Everything is fine until it isn't. When people get hurt, understandings can get forgotten ,sometimes out of desperate need. Sure you don't want your tractor burning up and not being covered. The bank however usually has what's called a "single interest" coverage on the policy, meaning if you really screw up and do something invalidating your coverage, the bank gets paid because they had a legitimate interest and they did nothing wrong.
I have been offered money time and time again to do little jobs. Tractors do so much...but I always say no. I'm not losing my retirement to some lawsuit.
I once said I'd do a job for a homemade apple pie. Hopefully that would not stand up in court as compensation...my it was good.
