Auto Paint Shop Insurance – Cost and Types Of Policies

Whenever you budget the expenses of your business, auto paint shop insurance must be high on the list because you can’t always know exactly what can happen in the future.

With the protection provided by liability insurance and all the other sorts of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your auto paint shop enterprise, you must consider how much financial risk you are taking on.

If your auto paint shop business runs without proper insurance, you are taking a giant chance not just of losing some money but of a complete wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for startup businesses to explain what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your auto paint shop business?

What this means, for any auto paint shop business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your auto paint shop business is not harbored by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Montana, there are specific monetary levels that limit the amount a judge can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have sued for.

When you are running your auto paint shop operations, you can’t deny responsibility for the consequences of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as a corporation, all of that liability belongs to you as a person.

What does auto paint shop insurance protect you from?

For your auto paint shop business, the most important sorts of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

As well there are some mandatory kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any auto paint shop business owner should consider when negotiating the insurance needed.

The main headings of insurance for your auto paint shop businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any auto paint shop business is dealing directly with members of the public, and that means you usually have the danger that some accident can happen to them bodily or else something of theirs can be spoiled.

In such a case, they can require compensation.

General liability insurance policy for your auto paint shop business insures you against claims coming from injury to clients or damage to their property.

It protects your auto paint shop business from the claims themselves and also to any follow-on court costs and legal fees of the lawsuits.

In many cases, it can also help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The average level of general liability insurance for your auto paint shop business would be with a upper limit of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your auto paint shop insurance operations.

Professional liability insurance for your auto paint shop business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your auto paint shop business for them, you can quickly face a monetary claim.

Even if the lawsuit against you is decided in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Almost all small auto paint shop business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of auto paint shop insurance section below for average prices of professional liability insurance for your auto paint shop operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that the results didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to understand the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for injuries caused by products claimed to be defective.

To cover yourself against any possible lawsuit, you need Product liability insurance for auto paint shop

Only you can know exactly how much insurance you should get.

Best advice is to contact experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your auto paint shop business

Take care! – practically all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the van is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial van policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is covered if your truck is involved in a collision.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The necessary value of the insurance is worked-out for the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your auto paint shop business needs specific and dedicated equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy everything needed to keep your auto paint shop business running.

It is hard to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your auto paint shop business’ equipment.

Commercial Property insurance

Any auto paint shop business that owns or rents space in a building needs a commercial property insurance policy.

If you own the property, you probably have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Every physical building location needs to carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your auto paint shop business works in areas of high risk, like Texas or Georgia, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where extreme cold snaps can cause damage to outer coverings of auto paint shop business premises, there is a need for more extra cover than in warmer climes.

Because the level of cover depends entirely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of auto paint shop insurance section below to give some idea of the average prices per million dollars of property insurance for your auto paint shop business.

Temporary insurance by month, week or day for your auto paint shop business

Is your auto paint shop business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for auto paint shop – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having reduced premiums but still having adequate risk cover.

The essential feature of short-term insurance is that you buy the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your auto paint shop business

You have the choice to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized auto paint shop businesses, such as yours.

There are some limits that will rule whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle cover.

Also, the size of your business will rule whether you are allowed to take out BOP cover.

The typical business that is eligible for a BOP policy must have less than one hundred employees, and under five million dollars in annual turnover.

Plus, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your auto paint shop business employees

In most states, it is mandatory to have workers compensation insurance when your auto paint shop business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you cannot get your workers compensation obligations from private insurance corporations.

Workers compensation rates are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every auto paint shop insurance need is unique, there are enough examples of average quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have gathered for the main types of insurance your auto paint shop businesses needs.

Cost of insurance for your auto paint shop operations depends on many different factors.

We have calculated these figures for small freelance auto paint shop businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, but in smaller states like New Mexico, they can be about 20%-30% less.

The location and size and type of your auto paint shop business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for auto paint shop operations?

This is an umbrella term used to describe common insurance policies designed to protect auto paint shop business owners from risks like bodily injury, property damage, claims of negligence.

Does my auto paint shop business have to have insurance?

Some of the forms of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small auto paint shop business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for auto paint shop insurance.

How much will auto paint shop business insurance cost?

On top of the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for auto paint shop, in the search box below, and follow the relevant links.

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