If you are looking for insurance for your auto body repair and paint shop, then you have come to the right place.
You have worked hard at building up your skills and reputation to repair vehicles that have been in car crashes and fender benders. You are rightly concerned about protecting yourself from liability. After all, your customers rely on your advice and want their vehicles to look good as new again, don't they?
That is why auto body repair shops can be sued for fraud and negligence in performance of their repairs.
In fact, here in the USA, collision repair shops are sued all the time for issues such as these:
- Faulty work
- Customers slip and fall while in the garage area
- Peeling paint
- Not using factory original parts
- Workers comp claims
What would you do if you were hit with a liability suit for more than your current insurance covered?
Thankfully, here at InsuranceHub, we have experience helping:
- Antique and classic automobile restoration
- Automotive body shops
- Automotive interior shops
- Automotive paint shops
- Automotive tops (canvas or plastic), installation, repair, or sales and installation
- Automotive trim shops
- Bump shops
- Collision shops
- Customizing automobiles, trucks or vans: except on a factory basis
- Upholstery repair for vehicles
- Van conversions, except on a factory basis
Types of exposure that collision shops need to protection from:
Property exposure: Your biggest concerns come from the flammable paints, chemicals, solvents and welding gas tanks that you use.
- Properly label, separate and store these 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 on 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.
- Do criminal back ground checks before hiring.
- Make daily bank deposit so you don't have too much cash overnight.
- Install video cameras.
- Monitor inventory regularly.
- Conduct annual audits.
- Install panic buttons.
- Install a monitored security system.
Inland marine exposure:
- Do you offer credit on repair balances?
- Do you use computers to monitor inventory?
- Do you use computers to mix paint?
- Backup copies of all customer and vendor records, including computer records, should be made and stored off site.
Premises liability exposure: Your biggest concerns are slips and falls.
- 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 lighting is working.
- Install sufficient exterior lighting.
- Install chains or fences if you keep customer cars on your lot overnight.
Environmental impairment exposures: Paint and solvents are toxic.
- Set up procedures to follow to prevent accidental leakage and contamination of water and soil.
- Set 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? Do regular MVR checkups on all drivers. Take the time to regularly maintain your vehicles so that tires and brakes are in good order. Keep good copies of those records!
Garagekeepers exposure: Anything can happen to a customer vehicle while it is in your garage.
- Be sure to properly secure all vehicles. What if one fell off a lift?
- A bolt that isn't tightened properly when changing a tire could cause the tire to fall off while your client is driving.
- Make sure that employees double check cars before working on them. You don't want to paint someone's car the wrong color!
- Keep customer keys in a locked box.
- Require photo ID before giving car keys back to the owner.
- Install plenty of exterior lighting in your lot.
- Install a chain or fence to prevent vehicle theft after hours and on the weekend.
Workers compensation exposures:
- Make sure that all hoists and jacks are well maintained and procedures are in place to prevent vehicles from falling.
- Enforce good house cleaning habits. Clean up leaks and spills immediately to prevent slips and falls. Do a shop cleaning at the end of every day.
- Teach good lifting techniques to avoid back injury.
- Provide safety equipment and enforce the wearing of it by your employees.
- Remember that prolonged exposure to fumes and vapors from paint spray can cause lung and skin problems.
Here is the minimum recommended collision shop insurance coverage:
- Business Personal Property
- Business Income
- Employee Dishonesty
- Money and Securities
- Accounts Receivable
- Computers, Valuable Papers and Records
- General Liability
- Employee Benefits
- Environmental Impairment
- Business Automobile Liability and Physical Damage
- Hired and Nonownership Auto
- Workers Compensation
Other body shop insurance coverages to consider:
- Leasehold Interest
- Real Property Legal Liability
- Computer Fraud
- Cyber liability
- Employment-related Practices
- Stop Gap Liability