What Insurance does an Auto Dealer Need?

What is Auto Dealer Insurance?

Auto dealer insurance is typically a combination of different coverages (such as general liability, property insurance, and business interruption coverage) that is used to protect auto dealers. 

Who Needs Auto Dealer Insurance?

• Used Car Dealerships
• Motorcycle Dealers
• Used car dealers
• Recreational Vehicle Dealers
• Boat Dealerships
• Trailer Dealers
• Auto Repair Shops
• Farm Equipment Dealers

What Auto Dealer Insurance Should Include

General Liability Insurance: General liability coverage is the most basic policy that every dealership needs as a foundation to protect its business. General liability covers third-party injury, third-party property damage, libel and or/slander, and copyright infringement. It covers necessary medical costs, repair or replacement of damaged property, and legal costs and settlements. 

Commercial Property Insurance: Property insurance helps cover the cost of repairing your building and replacing its contents in the case they are damaged by fire, some natural disasters, theft, or vandalism. 

Business Interruption Insurance: If your auto dealership and the cars on your lot are significantly damaged due to storms, a fire, or other mishaps, this coverage can help offset your costs by paying for lost profits, lost wages, taxes, operating expenses, payroll, and more. This coverage is often referred to as business income.

Business Owners Policy (BOP): A BOP is usually a combination of general liability, commercial property, and sometimes business interruption insurance. It’s usually packaged at a more affordable price than other individual coverages. Depending on the insurance company, they sometimes bundle other coverages related to your industry under the same policy. 

Workers Compensation: If you employ auto mechanics, sales professionals, and administrative assistants and any other type of employee—you need workers comp insurance. It helps pay for medical costs and lost wages if an employee is injured or becomes ill on the job. 

Errors and Omissions Insurance: If you or an employee of your business are accused of professional negligence or other errors in judgment that cause harm to a customer, you can be held legally liable. Errors & Omissions Insurance (sometimes referred to as Professional Liability Insurance) provides coverage to protect you and your business.

Employment Practices Liability Insurance (EPLI): EPLI is necessary in case an employee sues the small business and/or small business owner or other employees for discrimination, harassment, wrongful termination, breach of contract, etc. 

Other Policies to Consider to Protect Your Dealership

Dealers Open Lot: If your auto dealership contains vehicles mostly in an open lot, there are a lot of inherent risks. This addendum to your auto policy can include comprehensive coverage for damage resulting from lightning, storms, hail, flooding, fire, explosions, and vandalism.

Garage Liability Insurance: While it’s another name for a general liability policy, if you have an auto repair shop onsite at your auto dealership, you may want to consider this coverage (which can bundle certain policies). 

Garage Keepers Liability: If you also run an auto repair shop, this covers associated repair expenses if a customer’s vehicle is damaged on your lot while in your care. 

Commercial Auto Insurance: You need to protect your monetary investment in your vehicles. If your auto dealership also operates a garage with a tow truck this can be protected under a specialty commercial auto policy.

How Much Does Auto Dealer Insurance Cost?

Because the cost varies considerably, most insurance companies don’t list generic pricing on their websites. Some of the variables they may consider include:

• How many vehicles are on your lot
• The price point of the vehicles you sell
• The number of employees you have
• Whether or not you also offer auto repair
• The age and size of your commercial property

These are just a few of the factors taken into consideration. For a comprehensive look at what the cost may be, talk to an agent today. 

Get a Free Auto Dealer Insurance Quote

Let us help you protect your small business and keep your mind at ease. At CommercialInsurance.Net, our goal is to help you protect your business as efficiently as possible. Insurance for auto dealers doesn’t have to be expensive—get a competitive business insurance quote from one of our specialists by completing the form above. We will contact you soon!

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