Auto Repair Shop insurance – what kind and at what cost

Whenever you budget the expenses of your business, Auto Repair Shop insurance must be near the top of the list because you can’t always know exactly what is going to happen in the future.

Need General Liability Insurance for Your Auto Repair Shop Business?
Get Your Free Quote

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

Like any business owner, for your Auto Repair Shop enterprise, you must consider how much financial liability you are taking on.

If your Auto Repair 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.

Auto Repair Shop Insurance

In this article, we are giving very general guidelines for growing 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 Repair Shop business?

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

Your Auto Repair Shop business is not sheltered by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

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

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

When you are running your Auto Repair Shop operations, you can’t deny responsibility for the outcomes of your actions.

Even more importantly, unless you have spent beforehand the money necessary to have your business running as an LLC, all of that liability belongs to you alone.

What does Auto Repair Shop insurance protect you from?

For your Auto Repair Shop business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

Also there are some legal kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any Auto Repair Shop business owner should know when negotiating the insurance needed.

The main headings of insurance for your Auto Repair Shop businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability for your Auto Repair Shop operations

Any Auto Repair 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 personally or else something of theirs can be spoiled.

In such a case, they can require compensation.

General liability insurance policy for your Auto Repair Shop business insures you against claims coming from injury to customers or damage to their property.

It protects your Auto Repair Shop business from the claims themselves and also to any resulting 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 demand proper liability insurance.

The normal level of general liability insurance for your Auto Repair Shop business would be with a cap 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 Repair Shop insurance operations.

Professional liability insurance for your Auto Repair Shop business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Auto Repair Shop business for them, you can quickly face a monetary claim.

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

Almost all small Auto Repair 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 Repair Shop insurance section below for average prices of professional liability insurance for your Auto Repair Shop operations.

Product liability insurance for your Auto Repair Shop business

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

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

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

To cover yourself against any following lawsuit, you need Product liability insurance for Auto Repair 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 help.

Commercial insurance

Commercial vehicle insurance for your Auto Repair Shop business

Beware! – almost all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the vehicle 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 guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

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

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

The required 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 for your Auto Repair Shop business

Since your Auto Repair Shop business needs specific and costly equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The gear may be subject to malicious damage, deliberate fire, theft, other such unpredicted 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 specialized gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy everything needed to keep your Auto Repair Shop business running.

It is difficult to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Auto Repair Shop business’ equipment.

Commercial Property insurance for your Auto Repair Shop operations

Any Auto Repair Shop business that owns or rents space in a building should have a commercial property insurance policy.

If you own the property, you certainly have a substantial capital investment, as well as a big liability if there’s a mortgage.

Your physical building location must 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 Repair Shop business deals in areas of high risk, like California or South Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where unlimited cold snaps can cause damage to outer coverings of Auto Repair Shop business premises, there is a need for more additional cover than in warmer climes.

Although the level of cover depends completely 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 Repair Shop insurance section below to give some indication of the average prices per million dollars of property insurance for your Auto Repair Shop business.

Temporary insurance by month, week or day for your Auto Repair Shop business

Is your Auto Repair Shop business working part-time or casually, or is the level of business variable?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for Auto Repair Shop – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having the same risk cover.

The essential feature of short-term insurance is that you buy the cover for a defined period – a specific 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 larger business activity, get the existing cover improved.

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

Business Owners Policy BOP for your Auto Repair Shop business

You have the option 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 shield you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized Auto Repair Shop businesses, such as yours.

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

BOPs cannot cover your professional liability or commercial vehicle policies.

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

The normal business that is eligible for a BOP policy must have no more than one hundred employees, and not more than five million dollars in annual sales.

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

Workers Compensation insurance for your Auto Repair Shop business employees

In many states, it is mandatory to have workers compensation insurance when your Auto Repair Shop business has one or more employees.

Workers compensation insurance covers the enterprise 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 laws 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 permit coverage from the government-run monopoly state funds.

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

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

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

Average costs of these types of insurance for your Auto Repair Shop business

Although every Auto Repair Shop insurance level is unique, there are enough examples of standard quotes from insurance companies for us to give appropriate 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 Repair Shop businesses needs.

Types of insurance Price range
Public liability insurance $340 – $723
General liability insurance $629 – $1234
Commercial insurance $1132 – $2060
Equipment insurance $338 – $1253
Commercial vehicle insurance $1567 – $3268
Product liability insurance $229 – $666

Cost of insurance for your Auto Repair Shop operations depends on many different factors.

We have estimated these figures for small independent Auto Repair Shop businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they usually are about 20%-30% cheaper.

The location and size and type of your Auto Repair Shop business can have a big effect on the cost of different policies.

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

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

Another useful source of information is the local Better Business Bureau in your suburb.

FAQ

What is small business insurance for Auto Repair Shop operations?

This is a wide term used to describe standard insurance policies designed to protect Auto Repair Shop business owners from risks like bodily injury, property damage, claims of negligence.

Does my Auto Repair Shop business have to have insurance?

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

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

What does a small Auto Repair Shop business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a customer 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 best policies for Auto Repair Shop insurance.

How much will Auto Repair Shop business insurance cost?

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

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

Was this helpful? Share it!
SBCoverage.com
Logo
Enable registration in settings - general