What is the best Auto Body shop insurance?
Shopping for insurance for your auto body shop?
Want to find out what the best insurance policy looks like?
How do you find the best insurance policy for your collision repair business?
In this video we’ll explore your options and answer those questions, coming right up.
Business insurance for your body shop can be confusing. There are a lot of different insurance companies and brokers and direct writers out there pitching what they say is the best policy for your shop.
So how do you decide which is best?
In my opinion, the best policy is one that is crafted or tailored to your specific needs and not purchased off the shelf online.
I think you need to have a conversation with an expert who knows what they’re talking about when it comes to auto garage operations and can ask you the right questions regarding your business.
Here’s how I would break down the best policy. You’re basically dealing with three categories of protection.
- Protection for you
- Protecting your employees
- And, protecting your customers
I’ll take each of these categories separately.
Let’s start with protecting you.
That means two big issues – having the right limits of insurance on your property, including the building if you own it, your contents which includes all your tools, equipment, fixtures, and office contents.
Often garage owners will skimp here and not insure all their contents for their full replacement cost which is a mistake.
If you have a bad fire or other claims in your shop you want to be able to replace everything for its full value today, not what you may have paid for something 10 or 15 years ago.
The same is true for the building.
Building costs are always increasing, especially over the past two years, so to keep pace with the inflation of building material costs you need to protect the full value of your building.
The last bullet on property coverage is having business income or business interruption insurance either on an actual loss sustained basis for 12 months, or a stated limit that will cover your income flow for as long as you are burned out of your shop should a disaster strike.
The next item under protecting you is having at least $1,000,000 of liability insurance on your operation and including at least a $1,000,000 umbrella policy to give you an extra margin of protection against potential catastrophic claims which can occur in the auto body business.
If you fix a vehicle incorrectly and it causes an accident when you’re test driving it or a customer is driving it the results can be tremendously expensive so having enough liability protection is critical.
Protecting your employees
Here we’re talking about workers’ compensation to protect employees from work-related injury and illnesses.
Because workers comp is statutory in nature, there’s no significant difference in coverage between insurance companies.
One important point I will emphasize is that:
Some insurer’s audit departments are sticklers on non-shop workers such as clerical employees who step foot in the shop and assign their payrolls to the higher-rated shop rate.
Be clear with employees that non-shop employees stay out of the shop when an auditor is around or when asked about it or you’ll pay a steep increase.
Let’s move on to protecting your customers.
What I mean here is really about protecting their cars when they are in your care, custody, and control.
You have a responsibility to return those vehicles to your customers in the same condition as you received them.
If you damage them, ding them, or they get vandalized in your care, that’s going to be on you.
That means having garage-keepers insurance is important, and again, with sufficient limits to cover all the cars typically on your lot at any one time.
The other element about garage-keepers is that it can be written on a primary or legal basis and what that means is that if you have primary garage keepers, your insurance company will pay the claim for damage to your customers’ vehicle without any proof of your negligence.
This is good.
You’ll pay a little more for it, but the hassle that can be created by legal coverage isn’t worth the savings in my opinion.
There are lots of nuances to business insurance for auto repair shops that I’d be happy to go over them with you.
The bottom line is that
The best policy for your shop, like I said earlier is the one you spend time on with an expert broker tailoring to your unique needs.
And, when you work with an independent insurance agent or broker you get the advantage of having that one person go out to the marketplace to find you the best price options based on the customized plan you put together with them.
If you’d like to explore your options with me, give me a call or drop me an email.
You can also click the button below to get started. I’d love to hear from you.