From garage liability insurance to workers’ compensation, learn how to understand and purchase the right insurance for your automotive service business. Check out our comprehensive articles and resources to discover how you can protect and grow your business.
Automotive Service Business Insurance Basics
Types of Automotive Service Business Insurance
Who needs automotive service business insurance?
Every automotive service business could benefit from comprehensive insurance coverage, as the liabilities are high in this industry. From the expensive property that you may be servicing or in the process of selling to the dangerous equipment and chemicals you may be working with, auto service businesses face a variety of risks. With the right set of insurance policies, you’ll be better positioned to protect the safety and financial viability of your business.
If your auto service business meets any of the following criteria, you should consider investing in business insurance coverage:
- You own or lease commercial property
- You own or lease vehicles for business purposes
- Members of the public visit your business property
- You sell products or professional services to customers
- You own or store valuable property, including vehicles, computers, and auto equipment
- Customers temporarily leave their vehicles in your care
- You store sensitive data on employees or customers
- You employ others
Automotive Service Business Insurance by Profession
Why is automotive service business insurance important?
Accidents and injuries can happen, especially when interacting with customers.
Benefits: Business insurance can provide financial protection in the face of unfortunate accidents or injuries. If a customer is injured on your business property, general liability can provide coverage. If an employee is injured in the course of their work, workers’ compensation insurance can provide financial and medical benefits for them. On some level, the more successful your business, the more customers and employees you’ll have, which in turn increases the risk for an accident to occur.
Risks: Without insurance, a single accident or injury could put your entire business at risk. If your business is unable to come up with the funds to pay for damages or pay the legal fees necessary to defend your business, you may need to sell your business assets or declare bankruptcy.
Storing, servicing, or working with valuable property opens your business up to a number of risks.
Benefits: Business insurance can protect your business in case anything happens to your business property or customer property that you are storing or servicing. If you work with valuable property, like cars or auto repair equipment, commercial property insurance, commercial auto insurance, and garage coverage can provide funds to repair or replace property that is damaged by a covered peril, including fire, theft, vandalism, and more.
Risks: Automotive service businesses commonly work with expensive equipment and vehicles, creating severe risk if you are without adequate insurance coverage. If a natural disaster occurs or if your commercial space is burglarized, you may have difficulty recovering financially on your own. Without insurance, you will be picking up the entire cost of repairing or replacing damaged or lost property, and if your business is forced to shut down temporarily, you will need to pay out of pocket to keep your business going.
Certain types of business insurance may be required in your state.
Benefits: In many states, auto liability insurance is required for vehicles that your business owns and operates. In addition, in almost every state, businesses are required by law to carry workers’ compensation insurance. Even in the safest conditions, accidents can happen, which is why insurance is a necessary solution. If an employee is injured while working for you or if a customer is injured while at your business, insurance will cover you financially as well as make your business compliant with the law.
Risks: Without liability insurance, your business could be on the hook for defending against a lawsuit and paying any judgements or settlements. And without workers’ compensation, your organization is wide open to financial loss should a worker get injured or sick as a direct cause of working for you. Moreover, multiple injuries could lead to financial losses that ruin your business. As many places make workers’ compensation part of the law, avoiding the coverage can land you in legal trouble resulting in penalties, fines, and in some cases, imprisonment.