When you run an auto detailing or car wash business, there are many liabilities that could arise in the course of your work, from unintentional injuries to accidentally damaged vehicles. An unforeseen event or claim could be financially devastating for many businesses. It’s a smart idea to obtain a comprehensive range of insurance policies to financially protect you from these hazards.

What insurance coverage do I need for my auto detailing or car wash business?

There are many types of insurance coverage to consider, but these policies are particularly relevant to auto detailing and car wash businesses:

General Liability Insurance

Auto detailing and car wash businesses are at higher risk of general liability claims because of the high number of customers these businesses receive. When customers visit your location, there’s a possibility that they could accidentally injure themselves or their property could be damaged. If someone slips or trips and suffers an injury while visiting your premises, your business could be held liable. Businesses that provide mobile services also risk damaging property or causing injuries at a customer’s location. 

General liability insurance can protect your company if you are sued with claims of third-party bodily injury or property damage. General liability insurance also features a personal and advertising injury component that can cover third-party non-physical injuries and reputational damage from libel, slander, copyright infringement, and more.

Examples: 

• Bodily injury: After dropping her car off for detailing, one of your customers slips on a wet floor and falls, sustaining a head injury. Your general liability insurance would cover medical costs and legal fees if the customer sues.
• Property damage: Your mobile auto detailing service is at a customer’s home working on their new sports car. While working in the customer’s garage, your employee accidentally knocks over a vintage motorcycle, damaging it. General liability insurance would cover damages.

Commercial Property Insurance

Commercial property insurance protects the value of your building, machinery, equipment, tools, inventory, and other property. If a covered peril damages or destroys your business property, commercial property insurance will provide funds to repair or replace damaged items or rebuild if necessary. Commonly covered causes of loss include fire, theft, storms, hail, explosion, water damage, and vandalism. 

Example: 

• Worn out electrical wiring causes a fire to start at your car wash facility. The fire damages automatic car wash equipment. Your commercial property insurance would pay for the equipment to be repaired or replaced. 

Garagekeepers Insurance 

Garagekeepers insurance is a crucial coverage for many auto detailing and car wash businesses since customers often leave their vehicles on the premises to be cleaned or detailed. Garagekeepers insurance provides coverage for customers’ vehicles while they are in your custody. If an unexpected disaster damages a customer’s vehicle while it is in your care, garagekeepers insurance will reimburse you for the damages. Garagekeepers insurance can help to fill the coverage gap left by some general liability policies which specifically exclude coverage for vehicles belonging to others that are in your care, custody, or control.

Example: 

• After washing a customer’s car, your employee drives it out to be picked up. Unfortunately, he hits the gas instead of the brake while backing up and collides with a wall, damaging the vehicle. Garagekeepers insurance would cover the damages to the customer’s vehicle.

Business Interruption Insurance

Auto detailers and car washes cannot easily move their operations in the event of a disaster. If your property is damaged, you could be forced to temporarily close your business. This would likely cause you to lose significant income, while still having to pay fixed operating expenses like rent, utilities, and payroll. Business interruption insurance, also called business income insurance, is a common addition to a commercial property policy that provides coverage for lost income and operating expenses related to property damage.

Example: 

• After a fire damages your building and key equipment, you are forced to close your auto detailing business for two months while repairs are made. Business interruption insurance will cover your losses in income and operating expenses while you are temporarily closed.

Equipment Breakdown Insurance

Auto detailing and car wash companies may rely heavily on machinery and equipment such as pressure washers, buffers, and other items. If important machinery breaks down, it could halt or slow your operations severely, particularly as some replacement parts may be difficult to obtain on a timely basis.

While commercial property insurance covers damage to equipment caused by covered perils, like a fire or storm, equipment breakdown insurance covers damage caused by something internal, like a mechanical failure. If a key piece of equipment breaks down, equipment breakdown insurance can cover the costs of repair or replacement, in addition to lost business income while the equipment is out of commission.

Example: 

• Your automatic car wash breaks down because of an internal mechanical failure, meaning you must turn away customers and can’t accept new ones until repairs are made. Your equipment breakdown insurance would pay for repairs to the car wash and reimburse you for lost income.

Workers’ Compensation Insurance

Employees of auto detailing and car wash facilities are at risk for injuries caused by vehicles or automated washing equipment, as well as common slips and falls and other injuries. Even if you maintain strong safety regulations, there’s always a chance that an accident will occur.

Workers’ compensation insurance provides financial and medical benefits for your employees or their survivors in the case of a work-related injury, illness, or death. This coverage is legally required in almost all states, and companies may face severe fines or penalties if they do not abide by state guidelines for workers’ comp.

Example: 

• An employee is washing a vehicle when it starts to roll back because its parking brake was not fully engaged. The car rolls over the employee’s foot, breaking it. Your workers’ comp insurance would cover medical bills and a portion of lost income while the employee is recovering and unable to work.

Commercial Auto Insurance

If your business owns or leases vehicles or if your employees run work errands using their personal vehicles, you’ll need to secure commercial auto insurance. If an employee is in an accident while driving for business purposes, commercial auto insurance can provide coverage for physical damage to vehicles, third-party bodily injury, and property damage. 

Example: 

• While driving to pick up supplies for your car wash, one of your employees becomes distracted and accidentally runs a red light, colliding with another vehicle. Your commercial auto insurance would cover the damages.

Commercial Crime Insurance

Commercial crime insurance provides funds to reimburse you for losses caused by theft, robbery, fraud, forgery, burglary, and other crimes. This coverage applies both to crimes committed by outside parties and crimes committed by your own employees. Auto detailing services and car washes often deal heavily in cash, and some self-serve car washes may include coin-operated vending equipment. Because of this, the risk for theft of money or securities may be high. Commercial crime insurance can protect against this risk, in addition to providing coverage for employee dishonesty.

Example: 

• Someone breaks into your auto detailing business and steals money from your cash register and safe. Your commercial crime insurance would cover the loss.

Additional Coverages

• Pollution liability insurance covers third-party bodily injury, property damage, cleanup costs, and legal defense that results from pollutants released by your company. Use of detergents, waxes, and other chemicals can lead to accidental pollution of nearby water sources or soil. 
• A business owner’s policy combines general liability, property, business income, and extra expense coverage into a single package, which is often cheaper than purchasing similar coverage separately. This can be a good choice for qualifying small or midsize car wash or auto detailing companies. 
• Inland marine insurance is an important consideration for companies that provide mobile car washing or detailing services. This insurance will cover equipment that you take with you to various locations, which often would not be covered by a standard commercial property policy. 

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a car wash with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for auto detailing and car wash businesses:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

There are many common risks that could affect car wash and auto detailing businesses, from fires and accidental injuries to broken down equipment. A major disaster or customer lawsuit could jeopardize your business’s ability to continue operating. This is why it’s a good idea to purchase a range of business insurance that can provide valuable financial protection and help your company cope with any unforeseen catastrophes or lawsuits.