Auto Service Industry
In recent conversations with potential clients, it has become clear that all too often some insurance policies terms, coverages, and rates are not always evident. Since the auto service industry is my specialty, I wanted to take this opportunity to provide you with some basic information. Maybe this will raise some questions with your current agent like:
- Am I properly covered?
- Am I paying for something I do not need?
- Is there a coverage missing that I need?
There are two parts to a "garage" policy - garage liability and garage keepers.
Garage Liability—this part pays for bodily injury or property damage to third parties caused by an accident arising out of the ownership, maintenance or use of locations for garage business. Note: It excludes property damage to property in your possession that you do not own, i.e., a customer's vehicle. This exclusion is why garage keepers coverage is needed. All businesses need garage liability.
Garagekeepers: Because the garage liability portion excludes damage to your customers vehicle, you need to make sure you have garage keepers coverage. This provides coverage for a customer's auto while under the care of the dealership, mechanic, or storage facility. If you work on customers vehicles, you need garage keepers to provide coverage for their vehicle if it gets damaged while in your possession. Check with your agent—what limit do you have and what is the deductible.
Other coverages you should be aware of:
Employment practices liability insurance- covers claims brought by your employees for things such as wrongful termination, sexual harassment, and discrimination. This coverage is very affordable—and much cheaper than lawsuits and attorney fees;)
Equipment Breakdown coverage- We recommend all our shops have this coverage; it is very standard. Here is one example why: auto repair shop might see their hydraulic lift break down, resulting in temporary closure and hundreds of thousands of dollars in lost revenues and repair bills (equipment breakdown does not cover wear and tear). This coverage is very affordable, not expensive at all.
Professional liability coverage- insures against negligence claims that result from mistakes or failure to perform. Sometimes it is called mechanics E&O
Property insurance covers- equipment, tools, signage, inventory, and furniture in the event of a fire, storm, or theft. However, additional coverage is needed to cover events such as floods or earthquakes. Talk to your agent about what property coverage you have—is it enough to replace all that gets damaged?
Business interruption insurance- compensates for lost income during events when you cannot operate your business—a fire, windstorm, an accident that prevents you from opening your business. Check with your agent—If you cannot open your business due to an accident, you could suffer a severe financial loss if you do not have this coverage. We recommend all shops have some level of business interruption coverage.
Workers' compensation- This coverage is mandatory by the state if you have at least 1 employee. It provides medical expenses and lost wages to employees who are injured on the job. If you have an employee(s), check with your agent that you have this coverage. State fines for not having coverage are very costly.
I hope this has helped you gain a better understanding of what coverages are available. Whether you choose Linville Insurance or not, it is important that you are informed and protected to run the business we know you have worked so hard to build! Talk to your agent and make sure your program fits your needs.
As always, I am here to help answer any questions or concerns.
Thanks,
Blake Linville