The Flop Hat: The Time We Created an Uninsurable Business on Wheels

Published under The Entrepreneur Hat on HatStacked.com

Some business mistakes cost you a couple hundred bucks. Others leave you standing in a parking lot, staring at eight trailers you now own but can’t risk renting out. This is the story of how a side hustle idea turned into a masterclass in why due diligence matters.

How It Started: “People Always Need Trailers”

The idea was innocent enough.

We noticed that everyone in our area seemed to be moving, landscaping, hauling junk, or buying furniture from Craigslist. U-Haul was booked solid for weeks. Local rental places had weird hours or weird attitudes.

So we thought: what if we bought a few utility trailers, set up a basic booking system, and let people rent them by the day?

It sounded simple. Low maintenance. High demand. Passive-ish income. What could go wrong?

Step One: Buy the Trailers, Obviously

We skipped straight to step one of every classic entrepreneurial mistake: spend money before verifying anything.

We bought not one, not two, but eight trailers. A mix of utility trailers, enclosed haulers, dump trailers, and one glorious dual-axle monster that could probably tow a house.

We had them parked and ready before the website was even done. In our heads, this thing was printing money by next Tuesday.

Spoiler: it was not.

Step Two: Try to Get Insured Like Responsible Adults

After we had already spent five figures on equipment, we finally said the magic words every entrepreneur eventually utters:

“We should probably check into insurance.”

We called one agency. Then another. And another.

And here's what we learned:
Trailer rentals are basically uninsurable.

Not because it’s impossible, but because commercial insurance providers treat it like handing a chainsaw to a stranger and hoping for the best.

It wasn’t just expensive. It was inaccessible. The policies we found were either:

• Meant for massive rental fleets, not 8 trailers in a lot
• Prohibitively expensive (as in, your trailer needs to rent 40 days a month just to break even)
• So full of exclusions they might as well say “this covers you unless something actually happens”

We called another rental company and asked what insurance they used. They straight-up laughed. They were "self-insured". That was the actual quote.

Step Three: Realize the Risk (a Bit Too Late)

We tried everything.

• Waivers? Not enough.
• Requiring the renter’s own coverage? Too messy.
• Adding the trailer as a “temporary item” under someone’s auto insurance? Technically possible but functionally useless.

Here’s the bottom line:
If someone rented our trailer and caused an accident, we could be on the hook.
Not just the business... personally.

And although we set up an LLC, our lawyers heavily suggested against renting equipment without insurance.We had… eight trailers and good intentions.

At best, we’d lose the trailer. At worst, someone sues us for everything we’ve got.

Suddenly, that “easy side hustle” felt more like financial roulette.

So, What Did We Do With the Trailers?

We were able to repurpose most of the trailers in our other business, thankfully. A couple we sold at a loss. Not a disaster, but definitely not the ROI we imagined.

That “easy passive income” idea? Yeah, it hitched a ride out of town.

The Flop: Thinking the Idea Was the Hard Part

We thought the hard part was buying the trailers and building the system.

Turns out, the real hard part was the one we skipped: figuring out whether the business was viable after legal and insurance realities were factored in.

We didn’t ask the right questions:

• Can we legally rent these out?
• Can we safely rent these out?
• What happens if something goes wrong?
• What does liability look like in worst-case scenarios?

We assumed insurance would be a quick form and a quote.

We were wrong.

The Lesson: Do Your Due Diligence Before You Spend a Dime

This flop could have been avoided with one phone call.

Instead, we built the infrastructure of a business on hope and Google searches.

Due diligence isn’t glamorous. But it’s essential.

Check for:

• Insurance availability
• Legal structure and compliance
• Licenses and local laws
• Risk to your personal assets
• Real demand, not just your gut

Related: How to Start a Business Without Money

That post is full of ways to test your idea before investing real money. We recommend it to anyone who hasn’t yet spent thousands on rolling metal regret.

Final Word

We don’t regret trying something new. That’s part of being an entrepreneur. But we do regret assuming it would work just because it seemed like a good idea.

Don’t skip the unsexy steps.

Call the insurance agent. Talk to a lawyer. Ask someone who’s done it. Google past page one.

Do all of it before you buy eight trailers.