What type of insurance is required for an auto repair company?

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Asked January 2, 2014

1 Answer

An auto repair business comes with a variety of possible liability concerns, along with theft potential, and employee considerations. When you buy a business insurance policy, it typically includes most of the business related coverage you need, but you will have to get your employee and specialty coverage separately.

General liability insurance will take care of a majority of your liability needs, including injuries or property damage caused by your company or its employees during the course of business. If you get taken to court over a job, your general liability insurance will take care of litigation and any subsequent costs related to the case. Where you need to pay special attention is with the limits of the policy. Make sure that your liability is sufficient to handle a worst-case scenario, and then hope that nothing ever happens.

Whether you own the location or lease it, your auto repair company needs to have some sort of property insurance. This coverage would protect you against a variety of named perils, including fire, wind damage, hail, and others. When buying property insurance, remember that flood insurance is never part of a standard property insurance package, and may only be available from high risk insurers or a flood insurance pool managed by your state's Department of Insurance.

If customer vehicles will be stored on your property overnight or for extended periods, you may need to carry garage insurance to handle any vandalism or accidental damages while they are on the property. Similarly, if the auto repair business keeps stock on hand or sells parts directly to customers, you might want to look into a product liability rider in case of claims against your merchandise.

An auto repair business may need some specialty coverage, too. These can usually be added to your business insurance package as a rider rather than buying them as separate policies. Possible riders include tow truck insurance, leased tool coverage, and consideration for ecological and waste management claims that could arise from your business.

You will have to carry Workers Compensation for your employees. When the ACA goes into effect, businesses with more than 2 employees will also have to make health insurance available, but you will not be required to pay any portion of the premiums. Other riders you might need would be payroll insurance and commercial vehicle coverage.

Answered January 2, 2014 by Anonymous

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