Like any other small business, auto repair businesses need to be covered by several types of insurance. Your business may be liable for damages caused by employees or contractors. You may need to pay for injuries to others due to your company’s negligence.
Or maybe you just want peace of mind that your assets are protected against various risks associated with running an auto repair shop. Whatever the reason, you must invest in the right coverage, and not just any coverage will do.
Types of Insurance An Automobile Business Should Take
The importance of taking insurance when you run an automobile business can’t be stressed enough. It is a legal requirement and protects your business from financial loss in case of any incident.
Insurance can cover the cost of damage to your property or vehicle and medical expenses if someone gets injured while using your services or products. You should also ensure that the amount insured is enough to cover these costs and losses so that there are no problems with paying for them later on down the line.
Vehicular insurance is a mandatory requirement for all motorized vehicles. This coverage protects you from any liability claims arising from accidents involving your vehicle and damage to the car itself. While this may seem costly, it is affordable compared to other types of insurance.
According to the Bureau of Labor Statistics, around 13 vehicle accidents occur every minute in America alone. This means there are around 1 million crashes yearly in the United States alone.
As such, vehicular insurance plays a vital role in protecting potential liabilities and damages resulting from accidents involving your car or truck. You must therefore consider getting one.
It’s advisable to find a reputable vendor for this. A reliable vendor like OTTIS can help get this type of coverage quickly and hassle-free. Such vendors make the process smoother irrespective of the severity of the situation.
Moreover, a credible vendor understands the importance of staying committed to providing excellent services. Lastly, ensure your vendor offers vehicular insurance at low rates and maximum success capacity.
Commercial General Liability Insurance
Commercial General Liability Insurance is a type of insurance that protects your business from claims arising from bodily injury or property damage caused by your negligence. This is important because any business owner should be aware of the risks associated with their operations and the possible damages that could result if they’re ever found to be at fault in an accident.
For example, say your company owns a car dealership. In that case, the risk is always there for one of your customers to rear-end another vehicle while on their way home after visiting you. With CGL coverage, you would be covered under this policy if a customer was injured in this type of accident and needed medical assistance or lost wages due to the incident.
Additionally, if any other party were involved in such an incident and decided they wanted to claim against you for damages resulting from their injuries/lack thereof, such as property damage, then again, you would be covered by these insurance policies.
Business Owners Policy (BOP)
A Business Owners Policy (BOP) is similar to the Homeowners Policy. A BOP protects the business owner and their employees against losses from lawsuits and other claims for damages caused by injury or property damage. Unlike individual policies, it offers coverage for your assets, including real estate, business equipment, and inventory.
The most common reasons for not purchasing a BOP are cost and perceived lack of need – an unfortunate combination that puts these companies at risk if they suffer a significant loss.
If you don’t have a BOP in place already, there are two main reasons why you should consider getting one:
- You could be leaving yourself open to costly lawsuits
- You could be putting yourself at risk when it comes time to sell your business down the road
Garage Keepers Legal Liability Insurance
In 2020, three out of every four small businesses encountered an insurable occurrence. Almost 90 percent of those events were preventable and could have been mitigated with the right insurance coverage.
A garage keeper’s legal liability insurance policy is designed to offer protection against these types of incidents. The cost for this type of coverage will vary depending on your business’s size and location. However, it can typically be purchased for around $100 per month with discounts applied.
You must have this type of insurance because if a customer gets injured while in your shop or parking lot, the money spent on their medical bills can quickly add up, potentially bankrupt your business.
Workers’ Compensation Insurance
According to the Bureau of Labor Statistics, there were 4,764 workplace fatalities in 2020. That’s 3.4 per 100,000 full-time employees, a statistic much higher than you’d expect for a country where workers’ compensation is mandated by law and required by most employers.
Workers’ compensation insurance provides coverage for employees who are injured on the job, with medical expenses and lost wages paid out by the insurance company on behalf of your business.
Suppose a team member is hurt while working for your business. In that case, their claim will likely be covered under workers’ comp rather than another type of insurance though there can be exceptions depending on factors like whether an accident happened at home or at work vs. being involved in a car crash while driving around town after hours.
As an automobile business owner, there are many things you have to worry about daily. You have to ensure your business is running smoothly and that you’re making the right decisions regarding managing employees, marketing strategies, and more. But one thing that shouldn’t be on your mind if you own an auto shop is insurance.
To help alleviate some of the stress of operating a successful automobile repair shop or dealership, we’ve put together this comprehensive breakdown of what must-have insurances are for vehicle service businesses.
After reading through this article, we hope you’ll feel confident in knowing which policies will best protect your assets from claims by other drivers, and most importantly, you’ll feel confident knowing how much coverage each policy provides for different types of damages.