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IT equipment finance
Yes, if you advise customers on what to lease or rent, configure the equipment, or wipe and refurbish it when it comes back. The finance itself rarely causes a PI claim; the advice and services around it do: the wrong specification, kit that cannot run the customer’s software, or a returned laptop that still holds its data. Those are financial and data losses, not accidental damage, so public liability will not respond. A pure funder that never advises or handles data carries far less PI risk.
Part of: Professional indemnity for IT professionals
In short
IT leasing and rental firms carry three professional risks: specification advice, services such as configuration and deployment, and data sanitisation when devices come back. The NCSC says media holding sensitive data should be sanitised before the device leaves organisational control, and the ICO has approved the ADISA ICT Asset Recovery certification for processors providing sanitisation services. Separately, hire agreements with individuals, sole traders and small partnerships can be regulated consumer hire, and introducing such customers to a funder can be credit broking; both need FCA authorisation unless exempt. PI usually covers negligent advice and services. It does not replace FCA permissions or equipment insurance.
Last reviewed 5 October 2026 by the Apex professional indemnity team.
Leasing and rental look like finance and logistics, and much of the business is. The professional risk sits in the services wrapped around the equipment: telling a customer what it needs, configuring and deploying devices, managing a fleet during the term, and collecting, wiping and remarketing the kit at the end. When one of those goes wrong, the customer’s loss is financial or data-related rather than physical.
That is why public liability is not enough. It covers accidental injury and damage, such as a delivery driver damaging a customer’s doorframe. It does not cover a customer stuck with a three-year agreement for laptops that cannot run its software, or a remarketed device that still holds its HR files. Those are allegations that your advice or service fell short, and professional indemnity (PI) insurance is the policy designed to answer them.
A pure funder that never advises, configures or handles data carries much less PI risk. Many IT lessors and rental firms do at least one of those things, and the advice is often given by sales staff who never think of it as advice.
The scenarios below are illustrative and are not real claims. Each describes what went wrong, who lost money and what they allege.
Leasing is not always outside financial services regulation. Whether your agreements are regulated depends on who the customer is, how long the agreement can last and what it is for. Getting this wrong is a regulatory problem, not an insurance one, so check your position with a specialist adviser and the FCA’s rules. These are the definitions that decide it.
| Rule | What it says | What it means for IT leasing |
|---|---|---|
| Consumer hire agreement (Regulated Activities Order, art. 60N) | An agreement under which goods are hired to an individual or relevant recipient of credit, which is not hire-purchase and is capable of lasting more than three months. It is a regulated consumer hire agreement unless it is exempt. Entering into one as owner is a regulated activity. | A lease or long rental to a qualifying customer can be regulated even if the kit is for business use. |
| Who counts as an individual (FCA Handbook glossary) | A natural person, a partnership of two or three persons not all of whom are bodies corporate, or an unincorporated body of persons that does not consist entirely of bodies corporate and is not a partnership. | Sole traders and small partnerships are included. Limited companies are not. |
| Business exemption (Regulated Activities Order, art. 60O) | A consumer hire agreement is exempt where the hirer is required to make payments under the agreement that exceed £25,000 in total and it is entered into wholly or predominantly for the purposes of the hirer’s business. | Smaller agreements with sole traders and small partnerships need a different exemption to fall outside regulation. |
| Credit broking (Regulated Activities Order, art. 36A) | Includes effecting an introduction of an individual or relevant recipient of credit who wishes to enter into a consumer hire agreement to a person who enters into such agreements by way of business. | Passing qualifying customers to a funder can itself be a regulated activity. |
| The general prohibition (Financial Services and Markets Act 2000, s.19) | No person may carry on a regulated activity in the United Kingdom, or purport to do so, unless authorised or exempt. | If your activities are regulated, you need FCA authorisation or an exemption before you carry them on. |
Leasing only to limited companies and other bodies corporate falls outside the consumer hire definitions above. If you also deal with sole traders, partnerships or consumers, tell your insurer, and expect questions about the FCA permissions you hold. PI is not a substitute for those permissions, and policies commonly exclude fines and regulatory penalties.
The end of a lease is where IT lessors carry much of their data risk, because devices come back full of a customer’s information and leave again for resale. The customer remains responsible for its own data, but once you agree to collect and wipe devices for it, you are handling that data on its behalf: under the UK GDPR, erasure and destruction are themselves forms of processing.
The National Cyber Security Centre’s guidance is that media that has stored data sensitive to a business should be sanitised before the device leaves organisational control. In practice customers often hand that job to the lessor, so your contract needs to say who wipes, when, to what standard and with what evidence.
| Usually covered by PI | Often excluded or limited | Needs a different policy |
|---|---|---|
| Negligent specification or suitability advice on equipment | Fines, penalties and regulatory redress | Damage to or theft of equipment on lease or in your rental stock (equipment or all risks insurance) |
| Configuration, imaging and deployment errors | Claims arising from regulated activities carried on without the permissions they need | Equipment damaged or lost in transit (goods in transit cover) |
| Data sanitisation failures on returned devices, where the service is declared | Promises about residual values or upgrade terms | Injury or damage caused by faulty equipment you supply (products liability) |
| Wrong asset records and certificates issued in error | Defects covered by the manufacturer’s warranty | Attacks on your own systems and customer database (cyber insurance) |
| Defence costs, including technical and data experts | Customer default and unpaid rentals | Injury to staff and visitors (employers’ and public liability) |
Cover is always subject to the policy wording. If your business description says only “equipment rental”, a claim about advice, configuration or data sanitisation may be disputed, so describe every service you provide.
Lessors and rental firms hold two sets of data: their own customer records, credit checks and contracts, and the data sitting on devices that come back to them. Cyber insurance and PI, which technology wordings often call errors and omissions cover, divide the consequences when either is exposed.
If your systems are attacked, or returned devices are stolen from your warehouse, cyber insurance pays your own costs: investigation, legal advice, notifying people where required and getting your operation running again. The customer’s claim that you failed to look after its data is a liability claim, which may sit under PI or the liability section of your cyber policy depending on the wordings. If you run a device management platform for a rental fleet, a compromise of that platform raises the same split. See cyber insurance explained for what each section does.
Your PI limit is driven by the size of your customers and the services you provide, not by the value of the equipment. Large corporate and public sector customers usually set a minimum PI figure in their contracts, and vendor or funder partners may ask for evidence of cover too.
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Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.
Yes, if you advise on equipment, configure or deploy it, or wipe and refurbish it at lease end. Unsuitable specifications, configuration errors and data left on returned devices cause financial losses public liability does not cover. PI pays defence costs and compensation when customers allege your advice or service was negligent, subject to the policy terms.
No law requires IT leasing or rental companies to hold PI. FCA authorisation may be needed for consumer hire or credit broking, but that is a regulatory permission, not insurance. In practice corporate and public sector customers, and some vendor and funder partners, ask for PI with a minimum limit in their contracts.
It depends on the customer. Hire to an individual, sole trader or small partnership that can last more than three months may be regulated consumer hire, unless exempt, for example where payments under the agreement exceed £25,000 in total and it is for business purposes. Hire only to limited companies falls outside those definitions.
The customer remains responsible for its own data, and the NCSC’s guidance is to sanitise media before a device leaves the organisation’s control. If your contract says you will wipe returned devices, you handle that data on the customer’s behalf and a failure can lead to a claim, which PI may cover subject to the wording.
It may, if the customer relied on your specification or advice and can show it was negligent. Where the customer chose the equipment without advice from you, a claim is weaker. Record the requirements the customer gave you and the reasons for your recommendation, and have the customer sign off the specification.
No. Physical loss of or damage to the equipment is a property risk. Your rental stock needs its own equipment or all risks cover, and leases commonly require customers to insure equipment in their possession. PI deals with financial loss caused by your advice and services, not with the hardware itself.
Apex arranges professional indemnity insurance for IT equipment leasing and rental companies across the UK. Tell us about your work and we’ll find cover that fits. Or call 0117 325 0027.
Start your PI proposal Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
