Automobile Repair Service insurance – cost and coverage

Whenever you budget the expenses of your business, Automobile Repair Service insurance must be included in the list because you can’t always know exactly what could happen in the future.

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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 unexpected happens.

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

If your Automobile Repair Service business runs without proper insurance, you are taking a tremendous chance not just of losing some money but of a final 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. 

Automobile Repair Service Insurance

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 we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Automobile Repair Service business?

What this means, for any Automobile Repair Service business owner, is that if some company 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 Automobile Repair Service business is not protected 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 Montana, 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 person more than they have claimed.

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

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

What does Automobile Repair Service insurance protect you from?

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

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

In the next few paragraphs, we will outline the most important points any Automobile Repair Service business owner should consider when negotiating the insurance needed.

The main categories of insurance for your Automobile Repair Service businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Automobile Repair Service 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 ruined.

In such a case, they can require compensation.

General liability insurance policy for your Automobile Repair Service business insures you against claims coming from injury to clients or damage to their property.

It protects your Automobile Repair Service business from the claims themselves and as well 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 normal level of general liability insurance for your Automobile Repair Service business would be with a boundary of $1 million for a single event 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 Automobile Repair Service insurance operations.

Professional liability insurance for your Automobile Repair Service business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Automobile Repair Service business for them, you can quickly have to fight a monetary claim.

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

Most small Automobile Repair Service 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 Automobile Repair Service insurance section below for average prices of professional liability insurance for your Automobile Repair Service operations.

Product liability insurance

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

You need to know the particular 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 possible lawsuit, you need Product liability insurance for Automobile Repair Service

Only you can determine exactly how much insurance you must have.

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

Commercial insurance

Commercial vehicle insurance for your Automobile Repair Service business

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

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

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

As well, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is insured if your car is involved in a crash.

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

The necessary value of the insurance is calculated on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your Automobile Repair Service business needs unique and costly equipment, you can appreciate 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 unforeseen acts.

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

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy any equipment needed to keep your Automobile Repair Service business running.

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

Commercial Property insurance

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

If you own the property, you may already have a substantial capital investment, along with 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 accidental occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Automobile Repair Service business operates in areas of high risk, like California or South Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

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

Whereas 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 Automobile Repair Service insurance section below to give some estimate of the average prices per million dollars of property insurance for your Automobile Repair Service business.

Temporary insurance by month, week or day for your Automobile Repair Service business

Is your Automobile Repair Service 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 Automobile Repair Service – 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 identical risk cover.

The key 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 better 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 Automobile Repair Service business

You have the chance 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 amalgamating 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 Automobile Repair Service businesses, such as yours.

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

BOPs do not cover your professional liability or commercial vehicle policies.

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

The typical business that can take out a BOP policy must have fewer than one hundred employees, and under five million dollars in annual revenue.

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

Workers Compensation insurance for your Automobile Repair Service business employees

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

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

The benefits provide for 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 authorize coverage from the government-run monopoly state funds.

In these states, you may not get your workers compensation obligations from private insurance providers.

Workers compensation rates 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

Although every Automobile Repair Service insurance level is unique, there are enough examples of average quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

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

The list below is of annual premiums we have collected for the main types of insurance your Automobile Repair Service businesses needs.

Types of insurance Price range
Commercial insurance $995 – $2783
Commercial vehicle insurance $1769 – $2584
Public liability insurance $372 – $544
General liability insurance $765 – $884
Product liability insurance $314 – $842
Equipment insurance $424 – $1134

Cost of insurance for your Automobile Repair Service operations depends on many different factors.

We have reckoned these figures for small self-employed Automobile Repair Service businesses.

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

The location and size and type of your Automobile Repair Service 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.

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

Another reliable source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Automobile Repair Service operations?

This is an umbrella term used to describe basic insurance policies designed to protect Automobile Repair Service business owners from risks like bodily injury, property damage, claims of negligence.

Does my Automobile Repair Service business have to have insurance?

Some of the kinds 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 Automobile Repair Service business insurance policy cover?

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

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for Automobile Repair Service insurance.

How much will Automobile Repair Service business insurance cost?

In addition to the size of the business, several 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.

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