Technical Update vol. 29 no. 46 - Understanding Coverage When Loaning County Equipment

Counties often receive requests to share or loan mobile equipment, such as trucks, graders, or emergency vehicles, with other local governments or organizations, especially during emergencies or regional projects. Understanding the coverage, responsibilities, and documentation requirements surrounding these arrangements is essential for protecting both the county and its assets.

USE OF COUNTY EQUIPMENT FOR EMERGENCY RESPONSE

When county-owned mobile equipment is used for official emergency purposes, including wildfire response or disaster relief, or other coordinated public safety operations, the equipment is generally protected under the Colorado Counties Casualty and Property Pool (CAPP). Coverage extends to property damage and liability exposure when the activity is performed in direct support of county operations or in fulfillment of an official county responsibility.

Counties may authorize non-county personnel to operate county-owned equipment under permissive use provisions, provided that the individuals are properly trained and qualified for the task. Before granting such use, counties should also confirm that the operator’s employer maintains active workers’ compensation coverage and appropriate liability protection.

LOANING EQUIPMENT TO OTHER ENTITIES

When county-owned equipment is loaned to another agency, municipality, or organization for non-county purposes, it is recommended that your county and the other entity enter into a simple lease agreement, so it is clear that the borrowing entity is providing the property and liability coverage. A simple lease should specify: 

• Which party is responsible for property and liability coverage (should be the borrowing entity); 
• The duration and purpose of the loan; and
• Requirements for proof of insurance (Certificate of Insurance). 

If you do not use a written agreement, the county risks significant exposure if equipment is damaged (as mobile equipment is very expensive to repair and/or replace) or if an injury occurs. Require the borrowing entity to provide a certificate of insurance showing adequate liability and property damage coverage.

OPERATOR COVERAGE

Each entity must provide workers’ compensation coverage for its employees when they operate mobile equipment. If county employees help with emergency operations, they remain covered by the County Workers’ Compensation Pool (CWCP) as long as duties fit their job scope. Report any additional pay for these assignments in the next year’s payroll audit. For non-county personnel using county equipment, confirm the individual is properly trained and authorized. 

WHAT THIS MEANS FOR COUNTIES

CAPP coverage is broad and is intended to assist counties in their day-to-day operations and emergency response. In an effort to limit liability and exposure for both your county and CAPP, we recommend that you ensure all agreements involving mobile equipment, mutual aid, emergency use, or intergovernmental cooperation clearly define coverage responsibilities. If you have questions, contact CTSI at (303) 861-0507.