What is Auto Dealer Insurance?

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Running an auto dealership is not easy. Whether it’s detailing vehicles in a dealer’s open lot, or selling used automobiles in a fancy showroom, keeping up with the competition while protecting your trade can be difficult. With all the various risks and liabilities that your business might face, protecting your investment should be your number one priority.

Offering a comprehensive business solution to auto dealers, auto dealer insurance is a specialized type of program meant to safeguard the financial interest of your business. From protecting high-value replacement parts to taking care of your customers and employees, all policies are specifically written to provide the right insurance coverage for your business. Depending on size and requirements, you can choose from a wide variety of available options and different plans that match the needs of your automotive business.

Do I Need Auto Dealer Insurance?

Many business owners think buying insurance for their business is just an added cost with no real benefits. While it’s true that some of your earnings each week go toward the cost of having insurance, the long-term benefit it brings is undeniably worth the investment. Day and night, there are instances beyond our control. Without dealer’s insurance, your company is at high risk and is exposed to liability costs and various financial obligations that might put your business in jeopardy.

What if someone breaks into your showroom and steals the prize for your car collection? What if your stockroom caught fire and most of your inventory was burned? How about the penalties you might incur for not following mandated state insurance requirements? Or if one of your customers accidentally slips or falls in your showroom while looking at vehicles? Physical damage to cars due to a hurricane or hail? In times like these, a well-planned insurance policy can help cover possible financial losses.

There are also some instances in which auto dealer insurance is deemed to be necessary for the operation of your business – such as acquiring dealer plate insurance. So what is dealer plate insurance? Special license plates are given to dealers to allow customers to test drive unregistered vehicles on public streets and highways legally. Dealer plate insurance protects the vehicle, the driver, and in some cases third party claims in the event of an accident while test driving the vehicle.

What Types of Insurance Policies Do I Need as an Auto Dealer?

Every business is unique, so needs may vary depending on your car dealership size, the state where you live, number of employees, and financial capability. Here are some of the most common insurance policies applicable to auto dealers.

General Liability General Liability coverage is the foundation of all liability insurance and offers diverse protection to car business owners. General liability provides coverage for bodily injury, property damage, and misleading advertisements, as well as libel, slander or copyright infringement, and similar types of personal injury. This essential coverage pays for legal defense costs, settlement expenditures, and medical expenses as a result of the business operation, subject to the limits of your policy.

Employment Practices Liability Insurance or EPLI Providing insurance for your company concerning employment practices, EPLI offers protection for employment-related charges such as harassment, wrongful termination, discrimination, breach of contract, retaliation, and other work-related issues. Even if you run a small auto dealership business, as long as you have employees, you would benefit from this policy.

Errors and Omissions (E&O) Insurance By providing service to customers looking for new and used vehicles, an auto dealership is one of the many businesses included under the service industry. And since your company deals with giving professional advice, E&O is a must for your business. It offers coverage for work that was not done correctly – errors or a critical step missed when providing a service – omissions, that could cause harm to your clients.

Business Income Natural calamities and man-made disasters can strike at any time without warning. Business Income provides coverage in such events by making sure that your company can continue doing business as usual even after the calamity. It covers loss of income, helping you cover payroll expenses and other business expenses during the restoration period.

Workers Compensation Another type of auto dealer insurance that’s vital for car dealers is Workers’ Compensation. Required by most states within the United States, Workers’ Comp protects both the employee and the employer. Workers’ Compensation covers medical expenses and lost wages as a result of work-related injury or illness. In exchange for this benefit, employers are protected from lawsuits relating to negligence.

Garage Keepers Liability An optional but essential policy for auto dealers is the Garage Keepers Liability. In the event of damage to your customer’s vehicle, it pays for claims while the vehicle is under your care, custody, possession, or control. Garage Keepers Liability includes coverage for fire damage, theft, vandalism, extreme weather, and collision damages that might occur within your place of business.

Garage Liability Often used interchangeably with the policy mentioned above, Garage Liability provides a different form of protection for franchised auto dealers and related businesses. It offers coverage for bodily injury and property damage caused by an accident that occurred within your shop or business. Garage Liability combines General Liability, Commercial Auto, and Legal Liability into one convenient policy.

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How Much Does Auto Dealer Insurance Cost?

Similar to any other policy, the cost of car dealership insurance varies depending on several factors. Most insurers will assess your location, number of dealer tags, driving record, and current number of employees before they can quote an accurate rate. Moreover, the total cost depends on the number of policies you wish to include, as well as optional add-ons such as cyber liability, special hazards, pollution liability, or others. Having a bad credit history can equally affect the rate of policies, as can your claims history.

Because rates can vary based on the coverage that best meets the need of your business, it’s best to discuss your specific needs and concerns with your trusted agent to ensure complete coverage.

Business Insurance

Running a business is challenging enough without having to worry about lawsuits, employee injuries or property damage. Having the right insurance gives you the peace of mind to focus on what matters - running your business.

The coverage you need depends on the type of business you run. A restaurant owner needs to be covered against customers possibly getting food poisoning while an accountant needs to be covered against calculation errors. CoverWallet's intelligent assessment system will identify the insurance you need based on your specific business, get you a policy that fits your budget, and do it all in less time than you think.

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