Automobile Service Center Insurance or Body Shop Insurance

Operating as an automobile service facility or automobile body shop, you have unique insurance needs. There are only a handful of insurance companies that write comprehensive coverages for your type of business. First, you need coverage to protect you if somebody gets hurt on your property or is injured as a result of the work you performed on their vehicle. This is called garage liability and is the service or auto body shop equivalent of general liability but because of the added risk of operating customers automobiles, you need this specialized form which includes liability coverage for injury to the public that might occur when you drive a customer's auto. Many insurance companies allow the shop to include their owned business automobiles and tow trucks on this policy. It has the same coverage as a normal commercial automobile policy, but the added benefit of extending coverage to customer's autos that you test drive or deliver.

The policy excludes damage to any automobile that is left in your care. Specific coverage is available to cover damage to your customer's automobile that is left with you. This coverage is called garage keepers liability. It is a type of comprehensive and collision coverage that covers your customer's auto only. Coverage can be written on a primary or excess basis which simply means that either your policy or your customer's policy responds first when damage occurs while you have their auto. Most policies limit the covered property to automobiles, so if you do work on other types of vehicles such as boats, motorcycles, ATV's, etc. there is no coverage at all. Coverage is limited to listed locations so any lot or garage used to store customer's autos must be scheduled on the policy.

Anderson Insurance Agency has been insuring automobile service and body shops for almost 40 years. We represent some of the most respected insurance companies in the automobile services industry. Click here to request a quote or contact us at one of two convenient locations: Manahawkin, 800-444-8507 or Long Beach Island, 800-999-1944.

If the shop owns their own building they will also need commercial property insurance to cover the building, contents and loss of business income. Endorsements are available to cover mobile equipment that may leave the premises, employee dishonesty, exterior signs and other extensions to cover any other unique insurance needs. Some insurance companies bundle a series of additional coverages and offer them in one endorsement and charge a flat fee rather than price each coverage individually. These enhancement endorsements can include: fine arts, outdoor property, computers, personal property of others, coverage for cash, mobile equipment, property in transit, sewer back-up, spoilage, lock replacement and a variety of other losses. They are usually inexpensive. If the building has boilers, a separate form of coverage is needed to cover damage caused to the building as a result of an explosion from the build up of pressure. Also any building with expensive or unusual machinery can purchase separate coverage called Boiler and Machinery Insurance, as the standard property policy does not do a good job protecting this type of equipment or business interruption that results from the loss of this equipment.

If the operation is located in any flood zone, flood insurance many be necessary to cover the building and contents. Business interruption caused by flooding is not covered.

If the shop hires employees or uses casual labor, a workers compensation policy will be needed to fulfill your statutory obligation to employees. Remember that casual employees are eligible for benefits, just like any other employee.

If the shop wants or needs to obtain higher limits of liability (exclusive of garagekeepers insurance) an umbrella liability policy will do the job.

Employers should consider purchasing employment practices liability insurance to cover them for suits from employees alleging wrongful termination, sexual harassment, failure to hire, failure to promote, non-compliance with the Americans with Disabilities Act, and other similar employment actions.

If you offer any benefit plans to your employees you should consider purchasing employee benefits liability insurance.

You may have an exposure to pollution. This exposure can only be assessed after a careful review of your operations. In many cases, coverage will not be available for this risk. The only option may be to implement a program to minimize the risk as you cannot completely avoid the risk and run a business.

This outline is offered as a general description of the kinds of insurance that can be included in an insurance program. It is not intended to replace a comprehensive and personalized insurance recommendation, which can only be offered after a thorough analysis of particular individuals or businesses operations.