To run a bounce house rental business legally and safely, it’s important to meet all legal and insurance requirements. Here’s a general overview of the necessary steps:
1. Obtain Permits and Licenses
Business Registration:
- Register Your Business Name: Choose a unique business name and register it with your state or local government.
- Choose a Business Structure: Decide whether to register as a sole proprietorship, partnership, LLC, or corporation. An LLC is often recommended for liability protection.
- File Formation Documents: Submit necessary formation documents to your state’s Secretary of State office. For an LLC, this typically involves filing Articles of Organization.
Local Permits and Licenses:
- General Business License: Apply for a general business license from your city or county government.
- Zoning Permits: Ensure your business location complies with local zoning laws. You may need a zoning permit if operating from a home or commercial property.
- Sales Tax Permit: If your state requires it, obtain a sales tax permit to collect sales tax on rentals.
- Health and Safety Inspections: Some localities may require health and safety inspections for businesses providing public equipment.
2. Purchase Insurance
General Liability Insurance:
- Coverage: Protects against claims of bodily injury or property damage that may occur during the rental and use of your equipment.
- Typical Coverage Amount: $1 million per occurrence and $2 million aggregate is common, but you may need more depending on the scope of your business.
Commercial Property Insurance:
- Coverage: Covers the physical assets of your business, including bounce houses, generators, and other equipment, in case of theft, fire, or other damage.
- Inland Marine Insurance: Specific to equipment that is frequently transported, like bounce houses.
Commercial Auto Insurance:
- Coverage: Required if you use vehicles for business purposes. Covers damages to your vehicle and liability for injuries or property damage in an accident.
Workers’ Compensation Insurance:
- Coverage: Required if you have employees. Covers medical expenses and lost wages for employees injured on the job.
Umbrella Insurance:
- Coverage: Provides additional liability coverage beyond your general liability and auto policies. This is useful for extra protection in case of large claims.
Recommended Insurance Providers:
- State Farm
- Allstate
- Geico
- The Hartford
- Nationwide
Insurance Agent Consultation:
- Seek Professional Advice: Consult with an insurance agent who specializes in commercial insurance to tailor policies to your specific needs and ensure adequate coverage.
Summary
Ensuring you have the proper permits, licenses, and insurance coverage is critical for legally and safely operating a bounce house rental business. By following these steps, you can mitigate risks and protect both your business and your customers.
