If you own or operate an auto shop, you already know that your business is exposed to a variety of risks. Whether it’s theft, vandalism, fire, or accidents, you need to protect your property, your equipment, and your employees. That’s where auto shop insurance comes in. In this guide, we’ll take a closer look at what auto shop insurance is, what it covers, and why you need it.
What Is Auto Shop Insurance?
Auto shop insurance is a type of commercial insurance designed specifically for businesses that provide services related to automobiles, such as repair and maintenance, bodywork, and painting. It typically includes a combination of different coverages that protect your property, your liability, your income, and your employees.
Property Coverage
Property coverage helps you repair or replace your physical property, such as your building, your tools, and your inventory, if it’s damaged or destroyed by a covered peril, such as fire, theft, or vandalism. It can also include business interruption coverage, which pays for your lost income and extra expenses if you’re unable to operate your business due to a covered loss.
Having property coverage is important because it can help you recover quickly from unexpected events and keep your business running smoothly. Without it, you may face financial losses that could put your business at risk.
Liability Coverage
Liability coverage protects you if you’re sued by a third party for bodily injury or property damage caused by your business operations. For example, if a customer slips and falls in your shop and files a lawsuit against you, your liability coverage can pay for their medical expenses, legal fees, and settlements or judgments.
Liability coverage is essential for any business that interacts with the public, as accidents can happen at any time and can be costly to litigate. Without liability coverage, you may have to pay for damages out of pocket, which could be financially devastating.
Vehicle Coverage
Vehicle coverage protects the vehicles that are in your care, custody, and control while you’re performing work on them. This includes customer cars, loaner cars, and your own fleet vehicles. Vehicle coverage can help you pay for damages or losses that occur while the vehicles are in your possession, such as accidents, theft, or vandalism.
Having vehicle coverage is important because it shows your customers that you take their property seriously and are willing to protect it while it’s in your care. It can also help you avoid disputes and lawsuits related to damages that occur during repair or maintenance.
Employee Coverage
Employee coverage protects your employees if they’re injured or become ill while working for you. This includes workers’ compensation coverage, which pays for their medical expenses, lost wages, and rehabilitation if they’re injured on the job, as well as employer liability coverage, which protects you if they file a lawsuit against you for negligence or wrongful termination.
Having employee coverage is important because it’s not only required by law in most states, but it also helps you take care of your team and minimize your liability for workplace injuries or illnesses. Without it, you may face hefty fines and legal penalties, as well as damage to your reputation as an employer.
What Does Auto Shop Insurance Cover?
Auto shop insurance covers a wide range of risks that are common to businesses that provide services related to automobiles. Some of the most common coverages included in an auto shop insurance policy are:
Coverage |
Description |
|---|---|
Property |
Covers your building, tools, equipment, and inventory against theft, fire, and other perils |
Liability |
Covers bodily injury, property damage, and other liability claims against your business |
Vehicle |
Covers the vehicles that are in your care, custody, and control while you’re performing work on them |
Employee |
Covers your employees’ medical expenses and lost wages if they’re injured on the job, as well as your liability for their injuries or illnesses |
Business interruption |
Pays for your lost income and extra expenses if you’re unable to operate your business due to a covered loss |
Garagekeepers |
Covers damages or losses to customers’ vehicles while they’re in your care, custody, and control |
Crime |
Covers theft, embezzlement, forgery, and other criminal acts committed against your business |
Equipment breakdown |
Covers the costs of repairing or replacing your equipment if it breaks down due to mechanical or electrical failure |
Why Do You Need Auto Shop Insurance?
Auto shop insurance is essential for protecting your business from the unexpected. Here are some of the main reasons why you need auto shop insurance:
Protect Your Property
Your auto shop is likely one of the biggest investments you’ve made. Protecting it from damage or destruction is crucial for keeping your business running smoothly. Having property coverage can help you repair or replace your building, your equipment, and your inventory if they’re damaged or destroyed by a covered peril.
Protect Your Liability
As an auto shop owner, you’re responsible for the safety of your customers and your employees. If someone is injured or their property is damaged due to your negligence, you could be sued for damages. Having liability coverage can help you pay for their medical expenses, legal fees, and settlements or judgments, and protect you from financial ruin.
Protect Your Income
If your auto shop is unable to operate due to a covered loss, such as a fire or a burglary, you could lose income and customers. Having business interruption coverage can help you pay for your lost income and extra expenses, such as rent and utilities, while you’re getting back on your feet.
Protect Your Reputation
Customers expect quality service and care for their vehicles when they visit an auto shop. If something goes wrong and their property is damaged or lost, they may blame you and seek compensation. Having vehicle coverage and garagekeepers coverage can show your customers that you take their property seriously and are willing to protect it while it’s in your care.
Comply with the Law
Most states require employers to carry workers’ compensation insurance, which protects employees if they’re injured or become ill while working for you. Failure to carry workers’ compensation coverage can result in fines, penalties, and other legal consequences. Having employee coverage can help you comply with the law and take care of your team.
Frequently Asked Questions
How much does auto shop insurance cost?
The cost of auto shop insurance depends on several factors, such as the size of your business, the type of services you provide, the location of your shop, and the limits and deductibles you choose. On average, auto shop insurance can cost between $1,500 and $3,500 per year, depending on the level of coverage you need.
Do I need auto shop insurance if I rent my shop?
Yes. Even if you’re renting your shop, you’re still responsible for the property inside it, such as your equipment and inventory. Having property coverage can help you replace or repair these items if they’re damaged or destroyed by a covered peril. You may also need liability coverage if you’re sued by a third party for injuries or damages that occur on the rented property.
What if I have a mobile auto shop?
If you operate a mobile auto shop, such as a van or a trailer, you still need auto shop insurance. Your insurance policy should include coverage for your vehicle, your equipment, and your liability. You may also need to consider additional coverages, such as commercial auto insurance and inland marine insurance, to protect your property while it’s in transit or on a job site.
What if I only do bodywork or painting?
If you only provide bodywork or painting services, you still need auto shop insurance. Your insurance policy should include liability coverage, garagekeepers coverage, and possibly vehicle coverage, depending on the type of work you do. You may also want to consider additional coverages, such as equipment breakdown and cyber liability, to protect your business from other types of risks.
Where can I buy auto shop insurance?
You can buy auto shop insurance from a variety of insurance companies and brokers. It’s important to work with a reputable and experienced provider who understands the unique risks and needs of your business. You should also compare quotes and coverages from multiple providers to ensure you’re getting the best deal and the right level of protection.
Conclusion
Auto shop insurance is a crucial investment for any business that provides services related to automobiles. It can protect your property, your liability, your income, and your employees from a variety of risks and losses. By understanding what auto shop insurance covers and why you need it, you can make informed decisions and choose the right policy for your business.