Regardless of who carries your business insurance, you can’t afford inadequate coverage.
As a shop owner, you know auto-body repair and car insurance, but are you familiar with what kind of coverage is best for protecting your business while keeping costs low? Here are four things to consider while insuring your auto body shop.
RECOGNIZE INSURANCE NUANCES
It’s important to vet what your coverage actually provides and not just carry a policy over from year to year. Because insurance is only purchased once a year, you may not have the right knowledge to evaluate your insurance coverage. Arrowhead simplifies the overwhelming process and helps you make an informed decision according to your specific business needs.
GARAGEKEEPERS VERSUS GARAGE LIABILITY
Two key components of a collision repair shop’s insurance portfolio are garagekeepers and garage liability insurance.
- Garagekeepers covers damage to a customer’s vehicle while it’s in your care. It doesn’t include the items inside the vehicle; that’s an additional cost.
- Garage liability covers everything else that happens to a customer or employee on the property, such as injuries, employee practices liability, and complaints. (This doesn’t include workers’ compensation.)
PROPERTY INSURANCE
Your shop is covered by property insurance. What's essential to consider is if you can afford to cover the true cost of your business or its depreciated cost.
The decision is between:
- Replacement cost: Pays what it would take to replace your property today (assuming you regularly adjust the payout cost to account for inflation).
- Actual cash value: Pays for the depreciated value of your building and goods.
It comes down to taking a hard look at what you can afford to lose in terms of premiums, deductibles, and payouts.
CAUGHT IN THE CROSSFIRE
It’s important to ensure you are only on the hook for your actions–not the actions of other parties involved in a typical collision repair business. If a customer is upset by something that’s really an insurer or parts manufacturer’s fault and lumps you into a lawsuit, make sure they’re insured and you all have cross-indemnification.
