Business Insurance for Auto Dealers
Running an auto dealership comes with plenty of risks, and that’s where auto dealer insurance comes into play. It protects your business from a range of potential problems, including accidents, property damage, and employee injuries. The right coverage can keep your business rolling without major financial hiccups. Let's break down the key parts of auto dealer insurance.
Garage Liability Insurance
- What It Covers: Garage Liability Insurance is designed to protect the auto dealer against third-party claims for bodily injury or property damage caused by business operations. This could include accidents that occur on the dealer's premises (e.g., a customer slips and falls) or accidents during a test drive where the customer is injured or causes damage to another vehicle.
- Why It’s Important: Auto dealers have high customer traffic and are at risk for liability claims. This policy helps protect the dealer from expensive lawsuits resulting from these types of accidents.
Garagekeepers Insurance
- What It Covers: This insurance provides protection for customers' vehicles while they are in the dealer’s care, custody, or control.
For example, if a customer leaves their car at the dealership for service and it’s damaged by fire, theft, vandalism, or another covered event, Garagekeepers Insurance will help cover the cost of repairs or replacement.
- Why It’s Important: Without this coverage, the dealership could be liable for significant repair costs, leading to potential financial strain. It’s essential for dealers who offer vehicle servicing, detailing, or parking as part of their business operations.
Dealer's Open Lot/Inventory Insurance
- What It Covers: This insurance covers the dealership’s inventory of vehicles, whether they are on the lot, in transit, or at another location, from risks like theft, vandalism, fire, flood, or hail. It provides protection for the cost of the vehicle if it’s damaged or lost.
- Why It’s Important: Auto dealerships often have a significant investment in their vehicle inventory, which represents a major portion of their business assets. Without this coverage, the dealership would be responsible for replacing or repairing vehicles out of pocket in the event of damage or loss.
Commercial Auto Insurance
- What It Covers: This insurance provides coverage for vehicles owned by the dealership that are used for business purposes. It includes coverage for accidents, property damage, and bodily injury claims involving vehicles used for tasks like delivering parts, transporting vehicles, or providing loaner cars to customers.
- Why It’s Important: Auto dealers typically use vehicles for various business operations. Commercial Auto Insurance ensures that these vehicles are properly covered in case of accidents, protecting the dealership from liability and repair costs.
Workers' Compensation Insurance
- What It Covers: Workers’ Compensation Insurance covers medical expenses, rehabilitation costs, and lost wages for employees who are injured or become ill as a result of their job. It also provides death benefits to families of employees who suffer fatal injuries at work.
- Why It’s Important: This coverage is required by law in most states for businesses with employees. In addition to meeting legal requirements, it ensures that the business can handle the financial responsibilities of employee injuries, preventing potential lawsuits from injured employees.
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