Starting any type of business is challenging, but it’s especially difficult when your business requires you to look after employees and a large inventory. For example, perhaps you own a dealership. In this scenario, you have to consider multiple factors to set your company up for success, and one of those factors is dealership insurance.
This piece of the puzzle is a crucial part of your business plan. Running a successful dealership doesn’t solely hinge on the sleek motor vehicles on your lot and the great salespeople on your team. If you want your dealership to thrive, you need insurance.
But what exactly is this type of insurance, and how much does it cost? While it’s not easy to find these answers online, that doesn’t mean the answers aren’t important. In fact, you should know everything there is to know about dealership insurance before you try to get it. That way, you understand what you’re looking for and know what to expect as you search for it.
Do you need dealership insurance?
It’s a common misconception that buying insurance for your business is an added cost that comes with little to no benefits, but that thinking couldn’t be further from the truth. There are long-term advantages of having insurance for your dealership. With so many things out of your control, your company is always at risk and easily exposed to various financial obligations and liability costs.
For example, what if someone breaks into your showroom and steals the most precious car in your collection? Or, what if your inventory burns because a fire happens in your stockroom? Even worse, what if you’re showing a customer around your dealership, and they slip and fall?
All of these scenarios are ones that you can’t prevent. They can happen at any time and any point of the day, and all you can do is react appropriately. If you want to have a good reaction, you need dealership insurance. With it, you won’t get overwhelmed and discouraged because of bad events.
Which dealerships need insurance?
Outside of the benefits of auto dealer insurance, you may be wondering if your specific dealership needs coverage. After all, there are many types of dealerships, so is insurance only applicable to a certain few?
Honestly speaking, the answer is no. Auto dealer insurance applies to any garage-related business. For example, you can get dealership insurance if you have one of the following companies:
- New and used car dealership
- Motorcycle dealership
- Motor vehicle dealership
- Recreational vehicle dealership
- Powersports dealership
- Boat and heavy equipment dealership
- Trailer dealership
- Auto transmission repair and glass installation
- General auto repair and service
- Truck repair and body installation
- Auto body shop and restoration
- Auto detailing shops
Any of these businesses can benefit from having dealership insurance, so if you have one of these companies, don’t hesitate to get a policy.
Types of dealership insurance
When you decide to get auto dealer insurance, you should seek coverage that’s personalized to your dealership. Luckily, there are many types of dealership insurance that you can choose from, and the one you move forward with should factor in the number of employees you have, the state your business is in, your dealership’s size, and your financial capability.
1. General Liability
This type of coverage is the foundation of all liability insurance. It offers diverse protection for auto dealers because it provides coverage for property damage, libel, copyright infringement, bodily injury, slander, misleading advertisements, and more. Additionally, general liability pays for medical expenses that rack up from business operations as well as settlement expenditures and legal costs.
2. Workers Compensation
It should go without saying that workers’ compensation is necessary for any business. Most states in the U.S. require companies to have this type of policy because it protects you—as the employer—and your employees.
With workers’ compensation, you’ll get coverage for lost wages and medical expenses that occur because of work-related illnesses or injuries. Additionally, you’ll receive protection if lawsuits regarding negligence ever come up.
3. Employment Practices Liability Insurance (EPLI)
This insurance is crucial if you have employees, even if your dealership is small. Employment Practices Liability Insurance (EPLI) provides protection for employment-related incidents like wrongful termination, breach of contract, harassment, discrimination, and other work-related issues.
4. Garage Keepers Liability
While this policy is optional, it’s still just as important. Garage Keepers Liability helps you if your customer’s vehicle is damaged. It offers protection for theft, extreme weather, vandalism, fire damage, and collision damages that occur at your dealership. It also pays for claims while your customer’s car is in your custody, control, care, or possession.
5. Garage Liability Insurance
This insurance is quite different than the one above, even though it’s easy to use them interchangeably. Unlike the policy mentioned above, Garage Liability Insurance provides coverage for property damage and bodily injury that happens because of an accident at your dealership. If you want to protect your business when accidents happen, then you need to get this coverage.
6. Business income
No business is immune to natural disasters. It doesn’t matter where your business is located—it can get caught in a bad storm. And if you want your dealership to continue operating after the natural disaster ends, you need business income insurance, which covers any lost income.
For example, maybe you need help covering business expenses that add up during the restoration period or need assistance with payroll expenses. In these cases, business income insurance is great.
7. Errors and Omissions Insurance
At an auto dealership, you’re supposed to help customers look for new and used vehicles, which means you work in the service industry. Because you give professional advice to customers on a regular basis, errors and omissions insurance is critical.
This type of coverage kicks in when your team doesn’t complete its work correctly. For example, if someone misses a critical step while providing a service or omits information that could harm customers, you want errors and omission insurance to protect you.
How much does auto dealer insurance cost?
Like most types of insurance, the cost of dealership insurance depends on a variety of factors. Consequently, it’s not easy to give you a specific rate in a blog post, but it is easy to tell you what insurance companies consider when determining your fee.
For example, a few factors come into play, including the following:
- The size of your dealership (i.e., the number of vehicles for sales, the square footage, and total business value)
- What state your dealership is in
- The number of employees at your dealership
- The number of insurance policies you choose
- The types of insurance policies that you purchase
If you want a specific quote for your auto dealer insurance, it’s essential to speak with an insurance company. But please keep in mind that it’s critical to contact the right business.
Most companies will give you insurance quotes that change at any given moment. Typically, none of the quotes are reliable until you commit, and that’s why it’s important to speak with the right insurance company.
Barry Risk Management is an excellent option if you want a rock-solid insurance quote that won’t change in the blink of an eye. Backed by a team with more than 30 years of experience, Barry Risk Management can find the right insurance policies for your dealership and give you a reasonable price that you can count on.
Just call 1-888-995-TAGS(8247) to speak with a representative at Barry Risk Management. They’ll give you a fast and reliable quote for your dealership insurance.