Monday, 23 March 2015

Basic insurance for an auto-detailing business

Hopefully this will offer some guidance on the various covers and options available to help you with the decision on what is most appropriate for your business. Seek the advice of a qualified insurance broker to ensure you are covered for the risks inherent in your detailing business,

General Liability Insurance

To protect you from the inherent risks of liabilities imposed by lawsuits and similar claims, this coverage protects your auto detailing customers in the event one of them is injured by a piece of equipment on your property or even in the case that a customer trips on a cord or hose and falls down and is injured while you’re doing work for them. You should look for coverage quotes in the $500,000 to $1 million range, which covers general liability in those amounts for your shop and/or mobile operation.

Garage Keepers Legal Liability Insurance

Fixed-location auto detailing business, you should look for coverage in the $50,000 to $100,000 range for damage to your customer’s vehicles during the time they are in your possession. In addition, coverage should include theft, fire and movement of the vehicles and/or delivery.

Note -turning small claims in to your insurance carrier may result in a higher premium.

If your operation provides pick-up and delivery of customer’s vehicles, a clean driving record keeps premiums low. Same thing goes for your employees. Before hiring anyone, make sure their driver’s license isn’t suspended, revoked or chock full of points. 

This can also affect your insurance rates.
If you are going to use your personal vehicle as your “mobile rig,” you may have to have your policy upgraded to a Commercial policy and that is where “umbrella” coverage could help defray the costs.

Business Interruption Insurance

Business interruption insurance would cover any loss of income that a business may suffer after a disaster while its facility is being rebuilt. If you carry this type of insurance and your auto detailing location is hit by flood, fire or other event that prevents you from working out of the insured location, your expenses are typically for 60 to 90 days.

Workman’s Compensation Insurance

Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue you for negligence. While the cost of workman’s compensation insurance is based on the type of business you run and the number of people you employ, it’s wise to budget on average of $50-$100 per employee per month for coverage. 

Workman’s comp can typically be purchased from the state in which you do business. And if your business is primarily detailing cars, your business should be rated under the classification of “auto laundry.” Just make sure the insurance doesn’t rate you as “auto service,” because your premium will typically be much higher under that type of classification. And as with all other forms of insurance, any claims made could increase the premium.

One final recommendation: Regardless of which type insurance you carry for your auto detailing business, be sure seek the advice of a qualified insurance broker, one that is a “rated” carrier by a credit rating agency dedicated to serving the insurance industry.

I hope the above article was informative. By having some understanding of the ‘What’ and ‘Why’ as well as the ‘How’ along with a little science to help you understand how the chemicals we use react, you can achieve the results you desire.

Questions and/ or constructive comments are always appreciated

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