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Professional liability: This could be very serious if you provide mechanical repairs to a car that result in a car wreck or fire, leaving someone hospitalized, injured, or even dead. Beware of defective mechanic work. Hire only the best mechanics, painters, and auto body professionals to do your repairs. Make sure your company culture demands doing it right the first time.

Here are some common examples of defective, negligent or even deceptive work may lead to a lawsuit:

• Performing the wrong procedure or repair.
• Failing to notice major repairs that need to be done. Be sure to do thorough inspections and document everything in your reports to the client.
• Causing damage to the engine or other parts during the work. Be sure to clean up any scraps, debris, dirty fluids, or other foreign objects during the repair that could cause mechanical or electrical problems if left in the engine compartment.
• Failure to fully repair worn or broken parts.
• Installing the wrong replacement part. Be careful to never install "junkyard," "knock-off," or "after-market" parts instead of those provided by the manufacturer.
• Modifying any parts so that the car is illegal to operate on public roads.
• Using inferior paint or replacement body parts.
• Not preparing the paint surface properly, causing the paint to bubble, peel, fish eye, etc.
• Scratching body paint while cleaning or working on another part of the car.

Property exposure: Many of the paints, lubricants, oils, degreasers, and solvents that you use every day are flammable. Ensure they are properly labeled, stored, and separated in locked cabinets for safety. Make sure that any welding is done by a professionally trained technician that will work safely so as to avoid fires or explosions. Install security systems and cameras to protect your clients' cars while they are in your shop.

Products liability exposure: What if the parts you install malfunction or are recalled? Do you currently have a check-off procedure in place before returning the car to the customer to ensure that everything is working safely and properly?

Premises liability exposure: Do you have clients that come to see you at your office location? Make sure that all snow and ice is cleaned from your sidewalks and parking lots. Train employees to spot and clean up spills and leaks immediately.

Environmental impairment exposures: Many of the paints and solvents you use may require ventilated paint booths to avoid EPA fines. Dispose of used lubricants, oils, degreasers, solvents, and batteries in the proper manner to avoid leakage or contamination. 

Automobile exposures: Do you have your employees picking up parts at the supply house? Check DMV records to make sure you only hire and authorize safe drivers to use company vehicles.

Do you offer car rentals to clients that have to wait until their automobile is repaired? Be sure to keep a copy of the renter's driver's license and proof of insurance. Use a rental contract that explicitly says that unlicensed or underage drivers are not permitted.

Garagekeepers exposure: Do you have employees moving cars around the parking lot and shop? Do you work at other body shops and repair shops? A garagekeepers policy will protect you from any damage that happens while the customer's car is in your care, custody, and control. Keep all customer keys in a locked cabinet.

Crime liability: Employee dishonesty can be in regards to social security numbers and credit card information. Smart business owners take the time to do background checks before hiring and permitting any employee on the clients' premises.

Workers compensation exposures: Ensure that workers use proper eye protection and masks to prevent exposure to chemicals, paints, and solvents. Ensure that employees are trained to work safely to avoid back strain.

Property exposure: Your biggest concerns come from the flammable paints, chemicals, solvents, and welding gas tanks that you use. To reduce your property risks, you should...

• Properly label, separate, and store flammables in approved locked metal cabinets.
• Make sure that all painting, coating, and rustproofing is done within spray booths with proper ventilation.
• Make sure that all wiring and light fixtures are UL-approved and meet electrical codes.
• Hire only licensed and insured electricians to do electrical work in your shop.
• Make sure all welders are properly trained to perform work behind flash/welding curtains.
• Keep all welding gas tanks in a safe, secure location.

Crime exposures: Your biggest concerns are employee theft, holdups, and burglary. To manage your crime-related risks, you can...

• Do criminal background checks before hiring.
• Make daily bank deposits that you don't have excess cash on your premises overnight.
• Install video cameras.
• Monitor inventory regularly.
• Conduct annual audits.
• Install panic buttons.
• Install a monitored security system.

Inland marine exposure: Your computers are some of your biggest inland marine exposures. Ask yourself the following questions to determine your inland marine computer risks. 

• Do you offer credit on repair balances?
• Do you use computers to monitor inventory?
• Do you use computers to mix paint?

As an added precaution, you should have backup copies of all customer and vendor records, including computer records, stored off-site.

Premises liability exposure: Your biggest concerns for your premises liability are slips and falls. To reduce the chances of someone taking a nasty fall, you should...

• Set up a customer waiting area.
• Set up signs clearly warning that customers are not permitted in the garage area.
• Repair frayed carpets and tears.
• Fix all holes and cracks in the floors.
• Repair all cracks and holes in the sidewalk and parking lots.
• Clean all spills immediately.
• Remove all snow and ice to prevent slips and falls.
• Make sure all emergency and exit lights work.
• Install sufficient exterior lighting.
• Install chains or fences if you keep customer cars on your lot overnight.

Environmental impairment exposures: Your auto body shop faces environmental exposures because paint and solvents are toxic. Reduce the risk of polluting the environment by...

• Setting up procedures to follow to prevent accidental leakage and contamination of water and soil.
• Setting up contracts for the proper disposal of all environmentally dangerous chemicals.

Automobile exposures: Do you have employees picking up parts and materials? Who is driving your vehicles? Your auto body shop might face automobile exposures. Lower your risk by...

• Doing regular MVR checkups on all drivers.
• Taking the time to regularly maintain your vehicles so that tires and brakes are in good order. Make sure that you keep good copies of those records!