When it comes to running a business, having a comprehensive insurance policy in place is essential. While having just a standard commercial property policy can cover some items, it often doesn’t encapsulate all the coverage that a business will need. This is especially true for car dealerships that require more specialized policies. Knowing what types of insurance a car dealership needs can help keep the business protected when the unexpected happens.
Insurance For Car Dealerships
Running an auto dealership is no small feat. Often, there are many moving parts at play like making vehicle sales, detailing vehicles, offering regular service maintenance, and keeping up with competitors. On top of that, there’s the risk that severe weather, a natural disaster, or vandals could damage a dealership’s inventory. With the many risks and liabilities that a car dealership owner faces, it’s important that dealerships have the right kind of insurance in place to cover all types of potential damages. Some of the policies car dealership owners should have in place include:
Commercial Property Insurance
All businesses must have commercial property insurance in place. There is always the possibility that a fire, theft and/or vandalism, flood, hail, or another calamity could cause damage to the business. With car dealerships, this is of paramount importance, as cars are often displayed outdoors, leaving them vulnerable to a myriad of situations that could result in property damage. Commercial property damage insurance covers damage to physical assets like equipment, buildings, inventory, and third-party property. It can also provide for the replacement of stolen property or cover costs associated with theft.
General Liability Insurance
General liability insurance is also often required and offers diverse protection to dealership owners, such as coverage for bodily injury, third-party property damage, and personal and advertising injury, which encompasses misleading advertisements, libel, slander, or copyright infringement.
Workers Compensation Insurance
Workers’ compensation insurance covers the costs of medical expenses and lost wages for employees injured or falling ill as a result of the job. It also may offer protection from being sued by an employee who was injured on the job. This is important and often required due to the dangerous nature of working around motor vehicles.
Garage Keeper’s Liability Insurance
Garage Keeper’s insurance covers damage to a customer’s vehicle if it is damaged while under the dealership’s care. For example, if a customer’s vehicle is damaged while at the dealership for repairs. Garage keeper’s liability includes coverage for fire damage, theft, vandalism, extreme weather, and collision damage that might occur on the dealership’s premises.
Dealer’s Open Lot Insurance
Dealer’s open lot insurance applies to the vehicles on a car dealership’s lot that is for sale. This covers vehicles that get damaged in a wreck or collision and can apply when the car is driven by an employee and/or by customers test-driving it.
Garage Liability Insurance
Often used interchangeably with garage keeper’s liability insurance, garage liability provides a different form of protection for franchised auto dealers and related businesses. This specific policy offers coverage for bodily injury and property damage caused by an accident that occurred on the dealership’s premises.
Uninsured/Underinsured Motorist Coverage
In some cases, another driver might damage one of the vehicles on the sales lot. Uninsured and/or underinsured motorist coverage can help the dealership pay for the damage on its own if the at-fault driver does not have the appropriate liability insurance to do so or flees the scene of the collision.
Business Interruption Insurance
Most standard insurance policies only cover loss or damage to physical items, but they don’t cover lost profits if an unexpected event sidelines the business. If a car dealership is vandalized, for instance, standard insurance may cover the cost of repairing the damage, but the business will still lose money if it has to remain closed to fix the damage. Business interruption insurance helps business owners stay afloat by covering the costs associated with lost revenue and payroll while the business is inoperable.
When it comes to being an auto dealer, there are often large and varied risks involved that need to be insured. Since most auto dealerships operate out of large buildings and keep the entire value of their business on the showroom floor or on an open lot, the appropriate insurance policy or policies should cover everything from the building to the cars on the lot and much more. Despite having all the necessary coverage in place, however, car dealerships can still face difficulties with their insurance providers in the event a valid claim is not honored.
Car Dealership Insurance Coverage Attorneys
When an insurance company delays, underpays or denies the property damage claim of a car dealership, it can be incredibly upsetting for business owners. At Raizner Law, our experienced insurance coverage attorneys help protect a business’s interests in the event an insurer is utilizing bad faith tactics for its own financial benefit. Contact our office today to see how we can assist with your claim.
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