The insurance for equipment rental may be necessary for some situations, but it’s not obligated unless the agreement specifies that. Typically, a lessor would be required to obtain insurance when the lease is indefinite, and the equipment is expensive and risky to use. That way, both the lessor and the lessee would be protected in the event of accidental damage to the equipment or the property where the equipment is used. The equipment may be lost in any unforeseen circumstance, and the people using it may be injured.