When you run an auto parts store, it’s important to be prepared for incidents that could hurt your business, whether it’s a lawsuit over a customer injury or a fire that destroys your property. Unforeseen disasters could have a severe financial impact, making it difficult to continue operating. It’s a smart idea to protect yourself with a broad range of insurance policies that can shield your business from the financial consequences of unexpected lawsuits or accidents.

What insurance coverage do I need for my auto parts store?

There are many types of insurance coverage to consider, but these policies are particularly relevant to auto parts stores:

General Liability Insurance

Auto parts stores are constantly visited by customers, which means there’s a risk that a customer will be injured or their property will be damaged. Although you can reduce the likelihood of incidents by making sure your store is in good order, there’s always a possibility that someone could slip or trip and fall, and your business could be held liable. 

General liability insurance can step in to cover incidents of accidental third-party property damage, bodily injury, personal injury, and advertising injury.  This coverage will pay for medical bills and lawsuits if a third party is injured or has their property damaged at your auto parts store. 

General liability insurance also includes products and completed operations coverage. If your store sells a car part that malfunctions and damages a customer’s vehicle, this portion of your general liability insurance may cover the claim.  

Examples: 

• Bodily injury: An employee accidentally dropped a package of scratch-free cloths in the middle of an aisle while restocking. A customer slips on the package and falls, pulling a muscle and requiring medical attention. Your general liability insurance would cover the customer’s medical costs as well as your legal fees if the customer decides to sue. 
• Product liability: A customer bought a car battery from your store. The battery malfunctions and catches fire, destroying the customer’s car. Your business is named in a lawsuit alleging that you sold a defective product. General liability insurance would help cover the claim.
• Personal and advertising injury: One of your employees believes a customer has shoplifted and forcefully detains the customer until the police arrive. The customer was not shoplifting and sues your business for false arrest. Your general liability insurance would cover your legal costs and any resulting settlements. 

Commercial Property Insurance

Commercial property insurance will protect the value of your business property if it is destroyed or damaged by a covered hazard. Coverage includes buildings, furniture, computers, inventory, and other property. 

Property exposures can be higher for auto parts stores since many automotive products are flammable, such as oils, lubricants, degreasers, and other solvents. In addition, auto parts have a high resale value that can make them a desirable target for theft. If an unexpected disaster strikes your auto parts store, commercial property insurance can help provide funds to replace or repair any damaged business property. Commonly covered causes of loss include fire, theft, storms, hail, explosion, water damage, and vandalism.

Example: 

• A fire starts in your storage room, and part of your building is destroyed, along with much of your inventory. Commercial property insurance would cover the damages. 

Commercial Crime Insurance

Commercial crime insurance provides financial protection from losses caused by theft, fraud, robbery, burglary, forgery, or other crimes. This coverage applies both to crimes committed by outside parties and crimes committed by your own employees. Auto parts stores often have many employees and handle large amounts of cash, making them a potential target for theft or fraud. Commercial crime insurance can protect your auto parts store from the risks of employee dishonesty or third-party crime.

Example: 

• Your store is held up at gunpoint, and the thieves steal $6,000 from your cash registers. Commercial crime insurance would cover the loss. 

Business Interruption Insurance

Auto parts stores rely heavily on their retail locations; if property damage forces you to temporarily close, recovery can be very difficult. In addition to losing income, you may still be required to pay ongoing expenses such as rent and employee payroll. Business interruption insurance can step in to reimburse you for lost income and operating expenses if your store is forced to close due to a covered peril, such as fire or storm damage. This coverage is typically available as an addition to your commercial property insurance and covers the same perils.

Example: 

• A severe storm damages your auto parts store’s roof, causing it to collapse in one section. You must close your store until extensive roof repairs are completed. Business interruption insurance will cover your losses in income and operating expenses while you are temporarily closed.

Commercial Auto Insurance

Commercial auto insurance is necessary to cover company vehicles if your auto parts company makes deliveries or if your employees run errands in their cars. 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. If your employees drive their own personal vehicles for work purposes, you may need to add hired and non-owned auto insurance. This coverage will protect your company if an employee is at fault in an accident while driving a personal vehicle for work purposes.

Example: 

• Your employee is delivering car parts in a company van when he accidentally rear-ends the car in front of him. Your commercial auto insurance would cover damages to both vehicles. 

Additional Coverages

• Workers’ compensation insurance is legally required in most states for businesses with employees. Workers’ comp can cover employees’ medical expenses and lost income if they are injured while working.
• A business owner’s policy (BOP) combines general liability, property, business interruption, and extra expense coverage into a single package. For small or midsize businesses, this is a convenient insurance product that could help you obtain a wide range of coverage. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.
• Cyber liability insurance can cover financial losses that result from cyber events such as data breaches, hacking, viruses, denial of service attacks, and more. If your business accepts online orders or stores customer information like credit card numbers, cyber liability insurance is an important coverage to consider.

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, an auto parts store 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 parts retail businesses:

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

Final Word

Purchasing the right insurance coverage can protect your auto parts store from a variety of major risks, from customer injuries to natural disasters. If your company is hit with an unexpected lawsuit or accident, it can devastate your finances. With a wide range of insurance coverage, you and your customers can rest assured that your company will survive an unexpected catastrophe.