If you have an auto repair shop or a garage, the days are always packed. With cars that need to be fixed or serviced and returned to their owners, paperwork to handle, and premises to maintain, it’s hectic. One aspect of having a shop that you might be scratching your head about is auto body shop insurance. What coverages do you need? Auto shops aren’t without their risks, after all, and when life throws a curveball you have to be ready to hit it back. We’re going to go over five auto body shop insurance coverages you can consider.
5 coverages to consider for your auto repair shop
We’re going to go over the following insurance coverages for auto body shops:
- General liability
- Workers’ comp
1. General liability.
When you run an auto body shop, you’ve got customers coming onto your premises and into your shop. You’ve got people coming and going. What if, one day, someone gets hurt on your premises and decides to sue you? Lawsuits are not cheap, and the expenses can be a huge financial burden on a business.
But that’s where general liability comes in handy and why it’s an important part of auto body shop insurance. It can help you cover legal expenses if someone decides to sue you for bodily injury or property damage. GL can help you cover the injured party’s medical expenses, any court-ordered awards or settlements, and your legal fees. It’s a way for businesses to protect themselves against the risk of a lawsuit so that if you do get sued, the money isn’t coming out of your bank account.
How does general liability work? Here’s an example:
Your customer, Jack, is coming to pick up his car. It was in your shop for a minor repair. He’s thrilled that the car’s ready early, but when he gets to your shop he takes a bad fall in your parking lot. He breaks his arm and wrist, and it’s a pretty severe injury that’s going to take a lot of recovery. Jack decides to sue you. Your general liability could help you cover the costs that you’re legally obligated to pay to Jack.
Yep. This one’s important.
There’s a lot of flammable stuff in your shop, after all, from solvents to paint to oil to the gasoline in the cars. And the physical premises of your auto body shop isn’t exactly inexpensive. If something happened to it and you had a loss (whether a fire, lightning strike, vandalism, or windstorm), you’d want it to be put back to the way it was before, right?
That’s where property insurance can help you. You’d be covered for perils that you could face, such as fire, vandalism, wind damage, tornadoes, and so on. Of course, you need to read your policy carefully to see exactly what losses are going to be covered by your auto body shop insurance. Still, property insurance can help you protect the structure of your shop.
Let’s say that an electrical fire starts. With all of the flammable chemicals that are stored in your shop, it causes a lot of damage. So long as it’s a covered loss, property insurance can help you get your premises back.
Protect your auto repair shop. Get a quick business insurance quote today.
3. Workers’ comp.
This is a big one.
Your employees are a valuable part of your business. They’re your biggest asset – they’re the ones putting in the long hours and hard work to repair the cars that find their way to your shop. As an employer, you don’t want anyone to get hurt on the job, but if they do you want to be able to help them get the care they need to get better. And that’s why workers’ comp is another part of auto body shop insurance.
Workers’ compensation insurance can help them if they ever get hurt or become ill because of their job. If one of your employees ever has a work-related injury, workers’ comp insurance can help them by covering the costs of their medical bills so they can get the care they need to get better. It can also provide them with a portion of the wages they lose while they’re unable to work so they won’t have to worry about covering their living expenses. And in the worst-case scenario of an employee’s death, it can provide benefits to the employee’s family.
So, if one of your workers is working on a car and a very heavy wrench falls on their foot, they could receive workers’ comp help.
So, you keep your customers’ cars on your premises while they’re being repaired. Which means that you probably have care, custody, and control of the vehicles. And that means you could be found liable if anything happens to the client’s car while you’re looking after it. After all, you probably have quite a few cars at your shop at once, right? And the value of those cars is going to add up.
But garagekeepers insurance can protect you while you’ve got care, custody, and control of your clients’ cars. It can help you out if something happens to a client’s car while it’s on your premises and in your care. It typically covers losses like fire, theft, vandalism, and even explosion. So, if one of your customer’s cars is damaged, you’d be okay as long as it’s a loss covered by your policy.
For example, let’s say that someone sneaks into your yard after hours and trashes some of the cars on your lot. Garagekeepers can help you out.
5. Umbrella insurance.
General liability insurance is great, and it gives you really important protection against potential claims. But what if you had a claim that went above the limits of coverage on your GL policy? You might be in trouble, and you might end up having to pay the rest of the claim yourself.
But umbrella insurance gives you coverage that goes above and beyond what’s offered by your underlying liability policy. It can kick in where your other policy leaves off, meaning that it can help you out if your claim exceeds the amount of the other policy. Umbrella insurance sits on top of your other policy, pretty much.
To give an example, let’s say that you have a $1 million general liability policy. That seems like plenty, but you also have a $3 million umbrella policy, just in case. And it’s a good thing because one day you end up facing a $3.5 million liability claim. What happens is that your general liability policy would pay out its $1 million, then your umbrella would step in to cover the remaining $2.5 million.
Other coverages you can consider for your auto body shop insurance plan:
However, these aren’t the only auto body shop insurance coverages you can consider for your business. You can also think about…
- Business income
- Employee dishonesty
- Environmental impairment
- Commercial auto
- Accounts receivable
If you’re in need of insurance for an auto shop, say no more – we can help. Our agents can help you get multiple quotes for your insurance so that you can compare coverages and pricing. All you have to do to get started with your quotes is fill out our online form or give us a call today.