Like other professions, auto mechanics may find themselves laid off or working less than full time because of the current economic times. Some 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.
For any type of business, there are several basic needs, and some specialty insurance coverage to consider. General liability is the first piece of putting together an auto repair business insurance package. No matter how diligent you are, every day you are at risk of being sued. Court costs, 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 if 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.
Property insurance is the next insurance a business, including an auto repair shop, needs to consider. 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, pollutant clean up, equipment breakdown, computer equipment, and boiler and machinery insurance.
A business owner’s policy can provide a good insurance package by combining the coverage discussed. In addition, many of the options can be added as part of the business owner’s policy instead of purchasing separate policies for each.
If the auto repair business has employees, as a rule, workers' compensation is required. This is always purchased as separate insurance. 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.
Don’t 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.
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