It might seem like insurance agencies go on and on about the importance of having the right auto shop insurance and having enough coverage. And it’s true – we do. But for good reason. Auto repair shops are not without their risks, and all it takes is one disaster to turn the world upside-down for an unsuspecting business. One auto body shop in Saratoga County, NY, experienced such a disaster when a fire struck in mid-March.
What happened?
During the night of March 10th, a fire broke out at Neet’s Auto Shop. Fire crews responded to the intense fire, and there was an immediate challenge to the fire-fighting effort when it became clear that there was no easily accessible water. It took a while for firefighters to get the water they needed to fight the blaze. The fire was under control by 5:30 a.m. As far as a cause for the fire, that’s being investigated. According to news reports, the building was severely damaged and the fire spread through the office area, garage, and storage units. Thankfully, no one was hurt.
Neet’s Auto Shop has been a family business for 30 years.
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What questions do we have from an insurance perspective?
We don’t know the entire situation of what happened at the auto body shop, what insurance coverages they have, or what’s going to happen in the future, but a few questions came to mind from an insurance perspective when we looked at this news story. (Our brains are hard-wired to insurance.)
These are some of the biggest questions that came to mind:
- Were there any customer cars in the shop or on the premises?
The first thing we wondered about was whether there were any customer cars on the premises. This makes a difference because the auto shop would have had care, custody, and control of those vehicles – and therefore, they’re responsible for the cars. They could be on the hook for paying for the damaged vehicles. Does the shop have garagekeepers insurance?
- How long will the auto body shop have to stay closed?
The next question is how long the shop will have to stay closed while they rebuild the business. Since they have to close their doors temporarily, chances are that the shop is missing out on quite a bit of income simply because they can’t run the business as it’s usually run. Does the auto body shop have business income insurance?
- Was there environmental damage?
Auto body and auto repair shops are home to many harmful chemicals, and a fire can take all of those harmful chemicals and release them into the air. What was the environmental impact from the fire?
- Did the fire spread to anyone else’s property?
The next question is whether the fire spread to anyone else’s property or if it only affected the auto shop’s premises.
What coverages would be needed?
The purpose of insurance is to help businesses come back from disasters and losses like fires. But what coverages could come into play here? How would the business’s insurance help them recover from this fire?
Here are a few coverages that would be helpful for an auto body shop in this sort of situation:
Property insurance.
Property insurance would be very helpful in this fire situation. It’s the coverage that helps a business repair their building after a loss like fire or lightning strike.
Garagekeepers.
This coverage protects a client’s car while it’s in the care, custody, or control of a business such as an auto shop or a towing operation. It generally covers losses like fire, theft, vandalism, and lightning. Basically, it helps the business cover the expenses that they’re obligated to pay when it comes to damage to a client’s car from a covered loss.
Business income insurance.
One of the questions we had was how long the shop will have to be closed. When a business faces a loss like a fire, they, of course, have to close their doors while the repairs and rebuilding take place. And that means their income and revenue will take a hit since they can’t operate normally. Business income insurance helps reimburse the business for their lost income while they have to stay closed due to a covered loss.
We’re very glad that no one was hurt in the fire at the auto body shop. A business owner’s worst nightmare might be a fire sweeping through and destroying their livelihood. But that’s where insurance can help. Not only can it help save the day if something does go wrong, but it also provides peace of mind while everything’s going right.
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