Whether you specialize in getting your customers’ vehicles back to their pre-collision condition, or you prefer to focus on the service and maintenance aspect of the industry, we can insure your business! We also write motorcycle service and repair shops, and businesses that concentrate on auto detailing and paint services for their clients.
Insurance Coverages Relevant to Auto Body Repair & Service Shops
Commercial General Liability Insurance
This covers third-party claims for bodily injury and property damage. While you do all you can to maintain a clean and safe environment, the floors of body and collision repair shops can be slippery with oil and other liquids, raising the risk of a customer slipping and hurting themselves. Liability insurance coverage is a necessity of any business.
Commercial Umbrella or Excess Liability Insurance
It’s not unreasonable to consider a liability claim that exceeds your policy limit. Having this added layer of liability coverage to step in when needed, and continue covering defense costs for you and your business, is a cost-effective means of managing this risk. Another layer of $1,000,000 may not cost as much as you would think. It’s worth considering.
Garagekeepers Insurance (Physical Damage to your Customers’ Vehicles)
This covers your customer’s vehicle if it is damaged while left in your care, custody, and control. Someone could break into the shop and damage, vandalize, or steal your customer’s vehicle. You or one of your employees could accidentally damage the car while conducting a routine test drive after completing a service. This coverage is important to businesses who repair, service, store, or park others’ vehicles.
Building – Commercial Property Coverage
If you own the building, carefully consider how much it would cost to replace the building to determine the appropriate limit of coverage. Consider Ordinance or Law (link to bus covg pg to define) coverage if it’s an older structure, and review the coverage limit for water / sewer backup.
If you lease the building, be sure and read your lease carefully to understand if you’re responsible for glass breakage, or any other part of the property.
Business Personal Property (BPP)
Take a good inventory of all of the contents in your shop, and be sure you have adequate limits to replace all of the equipment, furniture, parts and inventory, and computers in the unfortunate event of a total loss such as a fire. The contents should be valued at Replacement Cost, and not Actual Cash Value (ACV).
Tenants Improvements & Betterments (TIBs)
Did you as the tenant invest money into permanently-attached equipment and/or fixtures before moving into your leased space, so that it was designed for your type of business? Property rates are typically lower for TIBs than the movable contents such as furniture and small pieces of equipment, so they your contents should be divided between Business Personal Property (BPP) and the Tenant Improvements & Betterments (TIBs) to insure them in the most cost-effective manner.
Tools & Equipment
If you want to insure your employees’ tools since they stay at the shop, be sure that’s made clear to your insurance broker, and you are aware of the deductible and maximum limit per item. You may have some higher valued company-owned tools or pieces of equipment that would be best insured by scheduling them on the policy with their value and serial number. If any of your tools or equipment are ever in transit (mobile services, etc.), consider an Inland Marine policy which covers the property while in transit, and not only on the shop’s premises.
Business / Commercial Auto
Any vehicle registered under the business name and/or used in the business operations should be insured as a Commercial Auto (not a Personal Auto) policy. This is particularly relevant if you offer mobile auto repair services, do off-site customer repair estimates, or run business errands such as picking up parts from a local supplier.
Hired & Non-Owned Auto Liability
You may need to rent a car under your business name (hired auto) due to one of your vehicles being temporarily unavailable.
Another common scenario is where you ask one of your employees to pick up some parts from a vendor across town. If the employee gets into an accident in their personal auto while conducting business, and their personal auto insurance limits are inadequate (i.e. state minimum limits) or nonexistent (i.e. lapsed their policy due to a missed bill), your business can be protected by having this secondary layer of coverage (non-owned auto). Unless non-owned auto “physical damage” coverage is purchased, damage to your employee’s vehicle is their responsibility, but damage to other people and/or their property caused by your employee when they’re legally liable for this damage, could be protected by this line of coverage. It’s good practice to verify your employees have active personal auto insurance policies with adequate liability limits if you intend on them using their personal vehicles during business hours.
Make sure you’re aware if the hired and/or non-owned auto coverage covers liability only, or physical damage as well. The appropriate coverage selection depends entirely on your needs and particular situation.
Flood & Earthquake
These two lines of coverage are almost always excluded from insurance policies. They must be purchased as separate policies.
Cyber Liability & Data Breach (link)
Employment Practices Liability Insurance (EPLI) (link)
Kristie English, M.Ed.
Principal / Agent
Do I really need to insure my customers’ cars if I have them sign a waiver that I’m not liable for any damage while the car is on my property?
Nobody requires you have this coverage, but not having it could cost you your business reputation and goodwill in the community if you had a loss and didn’t take care of your valued client.
There are two main types of garagekeepers coverage.
Legal Liability: Only pays if you are legally liable for the damage.
Direct Primary: While this option costs more, it’s a gesture of goodwill to your customers. It pays for damage to your customer’s vehicle regardless of fault. For example, a storm could result in a tree hitting your customer’s car, and this coverage would apply even though the weather was completely out of your control. It’s possible your client may not carry their own physical damage coverage on their car, and only have liability coverage.
We're here to help you understand the best options for protecting your Auto Repair Shop.
Call us at (833) BIG-TREE / (425) 673-7948, or use our online form to request a quote.