Insurance for Automotive Repair and Maintenance

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Why do Automotive Repair Shops Need Insurance?

According to the Department of Transportation, the average household has 1.9 personal vehicles, and that number continues to rise making your business more important than ever. Customers need your expertise to help them maintain their vehicles and accomplish their daily tasks. As an auto repair shop owner, you work with a variety of customers every day which is rewarding, but it also increases the risks you face. Auto repair shop insurance or mechanic insurance protects your business and reputation when lawsuits occur.

This industry includes various types of shops, such as auto repair shops and garages, oil change shops, window repair services, brake shops, transmission repair shops and other businesses that focus on the maintenance and repair of different car parts. Individuals who work in this industry can include mechanics, electricians, and store clerks.

Risks Automotive Repair and Maintenance Shops Could Face

Because you work directly with customers’ valued assets, you face many unique risks including:

  • Vehicle Damage: Customers leave cars and trucks in your care for the day or overnight. If an employee wrecks a car on a test drive or somebody breaks into it, the customer can sue you for the damage.
  • Mechanic Errors: Mechanics and auto technicians often offer a multipoint inspection with their services. If you overlook a safety problem that leads to an auto accident, you are responsible for the damages.
  • Employee injury: Mechanics use the same tools and hand movements for a number a projects. Repetitive motions like these can lead to carpel tunnel which is often considered a work-related injury.
  • Cyber Breaches: Hackers attack businesses big and small. Plenty of auto repair and maintenance shops store client information on computer systems including names, addresses, email, and payment methods. If your computers were compromised, how would you pay for the mandated notices, investigation, and any lawsuits that arise?

Types of Coverage Auto Repair Shops Need

Small business insurance is critical to your auto repair shop’s livelihood. It can be hard to determine which policies you need to buy. Every auto repair shop needs general liability, errors and omissions, and commercial property insurance. If you have employees you a need workman’s compensation insurance and if you store client information, cyber liability is also necessary.

  • Garage Keeper’s: Pays costs associated with damage to a customer’s vehicle while in your care. Vehicles must be stored in a covered location for this policy.
  • Commercial Property: Pays costs to replace or repair your business property including building and equipment for specific events like fires. You can also add business interruption insurance to help alleviate costs in the event of a temporary shutdown.
  • Errors & Omissions: Protects you if you fail to recommend or recommend something that causes harm to your customer.
  • Cyber Liability: Pays all costs associated with cyber breaches including notifications, investigation, and public relations services to maintain your reputation.
  • Work Comp: This coverage is mandated in most states when you employee a certain number of individuals. It covers costs from work-related injuries including loss of wages and medical bills.

Why do Auto Repair Shops Need Insurance?

According to the Department of Transportation, the average household has 1.9 personal vehicles, and that number continues to rise making your business more important than ever. Customers need your expertise to help them maintain their vehicles and accomplish their daily tasks. As an auto repair shop owner, you work with a variety of customers every day which is rewarding, but it also increases the risks you face. Auto repair shop insurance or mechanic insurance protects your business and reputation when lawsuits occur.

This industry includes various types of shops, such as auto repair shops and garages, oil change shops, window repair services, brake shops, transmission repair shops and other businesses that focus on the maintenance and repair of different car parts. Individuals who work in this industry can include mechanics, electricians, and store clerks.

What type of insurance does this industry need?

Policy What is it? Why get it Popularity in your industry Want free quotes?
General Liability 		This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

What is it: This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy.

Why get it: General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

Commercial Property 		This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

What is it: This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage.

Why get it: If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

Workers Compensation 		Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

What is it: Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work.

Why get it: Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

Inland Marine 		Inland Marine insurance covers goods in-transit either on land or through shallow water, as well as certain types of movable property (such as medical equipment). If your business has valuable equipment which regularly needs to be moved, then this can be a core policy to protect your property.

What is it: Inland Marine insurance covers goods in-transit either on land or through shallow water, as well as certain types of movable property (such as medical equipment).

Why get it: If your business has valuable equipment which regularly needs to be moved, then this can be a core policy to protect your property.

Umbrella Insurance 		Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits. This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.

What is it: Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits.

Why get it: This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.

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