Automotive insurance – what kind and at what cost

Whenever you budget the expenses of your business, Automotive insurance must be included in the list because you can’t always know exactly what can 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 unwanted happens.

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

If your Automotive business runs without proper insurance, you are taking an enormous 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 consequences of their actions. 

Automotive Insurance

In this article, we are giving very general guidelines for growing businesses to outline 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 Automotive business?

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

Your Automotive 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 New Jersey, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

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

When you are running your Automotive operations, you can’t escape responsibility for the outcomes of your actions.

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

What does Automotive insurance protect you from?

For your Automotive 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 Automotive business owner should consider when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any Automotive 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 damaged.

In such a case, they can require compensation.

General liability insurance policy for your Automotive business covers you against claims coming from injury to clients or damage to their property.

It protects your Automotive business from the claims themselves and in addition to any follow-on court costs and legal fees of the lawsuits.

In many cases, it will even 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 Automotive business would be with a boundary 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 Automotive insurance operations.

Professional liability insurance for your Automotive business

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

Even if the case 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 Automotive business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

See the table in the cost of Automotive insurance section below for average prices of professional liability insurance for your Automotive 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 you delivered didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to know the explicit 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 Automotive

Only you can determine 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 Automotive business

Be careful! – almost 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 best 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 cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

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

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

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

Tools and Equipment insurance

Since your Automotive business needs specialized and expensive equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The tools may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.

In addition, 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 should have full-level equipment insurance so that you can immediately buy whatever needed to keep your Automotive 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 Automotive business’ equipment.

Commercial Property insurance

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

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

Your physical building location should carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your Automotive 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 Illinois, where extreme cold snaps can cause damage to outer coverings of Automotive business premises, there is a need for more additional cover than in warmer climes.

Because 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 Automotive insurance section below to give some idea of the average prices per million dollars of property insurance for your Automotive business.

Temporary insurance by month, week or day for your Automotive business

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

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Automotive – 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 less premiums but still having adequate risk cover.

The important feature of short-term insurance is that you buy the cover for a defined period – a designated 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 improved.

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

Business Owners Policy BOP for your Automotive 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 incorporating these coverages into one insurance policy, which can save you money.

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

It is frequently the right choice for small and medium-sized Automotive businesses, such as yours.

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

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

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

The typical business that is allowed to take a BOP policy must have no more than one hundred employees, and maximum five million dollars in annual turnover.

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

Workers Compensation insurance for your Automotive business employees

In almost all states, it is mandatory to have workers compensation insurance when your Automotive 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 include 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 having 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 can’t take out your workers compensation obligations from private insurance corporations.

Workers compensation charges 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 Automotive insurance requirement 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 an insurance representative what’s relevant for your business.

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

Types of insurance Price range
Public liability insurance $396 – $548
Equipment insurance $400 – $1459
Commercial vehicle insurance $1996 – $2725
General liability insurance $568 – $863
Commercial insurance $957 – $2377
Product liability insurance $294 – $503

Cost of insurance for your Automotive operations depends on many different factors.

We have reckoned these figures for small freelance Automotive businesses.

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

The location and size and type of your Automotive 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.

Also 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 suburb.

FAQ

What is small business insurance for Automotive operations?

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

Does my Automotive business have to have insurance?

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

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

What does a small Automotive 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 Automotive insurance.

How much will Automotive 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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