Business insurance basics for a garage and repair shop.
Like other industries, car dealers have run into trouble in the recent economic times. Many mechanics have opted to open their own repair shops as a result. Like any business, auto repair businesses and the mechanics that own them need to get the proper insurance in place. Whether a home garage, or a leased or owned location, if you’re working on someone’s car, you must protect yourself with insurance coverage.
Every type of business has several basic needs, and then some specialty insurance coverage to consider for the mechanic. Let’s review these insurance coverage options.
The first piece of insurance a business needs to consider is property insurance, including auto repair shops. Property insurance will cover the building structure and furnishings as well as some equipment. Additional options that should be discussed include employee’s tools, debris removal and pollutant clean up, computer equipment, and equipment breakdown or boiler and machinery insurance.
General liability is the second piece of putting together an auto repair business insurance package. No matter how diligent you are, everyday you are at risk of being sued. Court costs and legal fees, damage awards, and time spent can financially ruin a business.
A general liability insurance policy will cover costs and protect the assets of the business. Garage keepers insurance also needs to be discussed where you are keeping customers vehicles for a period of time. Product liability insurance is another option that needs serious consideration. If you are towing vehicles, tow truck insurance will cover liability and damage claims in transit to the repair shop as well as bodily injury and property damage.
If the auto repair business has employees, then as a rule, workers compensation is required. While every state varies in specific standards, we recommend having workers compensation in place from the first employee hire. In addition, it may make sense to explore crime insurance and employment practices insurance as well.
Never assume your auto repair business is adequately insured. Talk to a licensed insurance professional who understands the needs of your business. Together you can design a plan to meet both risk and the budget.