Did you know that all of the insurance premiums that were written in 2020 exceeded over $1 trillion? It shouldn’t come as a surprise that you will need to have the appropriate insurance coverage if you want your business to be successful. For those who own a car dealership, though, it can be difficult to understand which types of coverage are best for you.
Let’s take a look at a car dealer insurance guide that outlines some of the types of car dealer insurance policies that you shouldn’t go without.
Commercial Property Insurance
This type of insurance will protect your dealership in the event that your property is damaged or destroyed. It can cover occurrences like natural disasters, fires, theft, and vandalism. Put simply, commercial property insurance will help you overcome common scenarios that would otherwise lead to substantial loss.
For example, imagine if you do not have commercial property insurance that can help you recover from a fire that your car dealership.
You could potentially be looking at hundreds of thousands of dollars in damages. Even if you can afford to accommodate this scenario, it will still prove to be a setback. A lack of commercial property insurance will also deter investors from choosing your business as an investment opportunity.
Business Interruption Insurance
If your company is forced to close because of an unanticipated circumstance, this form of coverage will assist you with covering your expenditures. Even a single day of closure could cut deep into your revenue.
For smaller businesses, it could even be impossible to recover from. Additionally, closures aren’t always something that you can control.
It’s much better to have this coverage in place so that you can handle any downtime that occurs. When moving forward, you will find that this is one of the best car dealer insurance policies you can purchase.
Product Liability Insurance
If you sell vehicles that end up causing harm to someone, product liability insurance will protect you from being sued.
It shouldn’t come as a surprise that this is one of the most important types of insurance coverage that you should have. For instance, let’s assume that somebody purchases a car with a mechanical defect from your dealership. Shortly afterward, the mechanical issue causes them to get into an accident.
Even though your dealership wasn’t at fault for the presence of the defect, you could still face a lawsuit. If the issue caused bodily harm or death, you run the risk of having to pay millions of dollars in compensation out of your own pocket.
Workers’ Compensation Insurance
If an employee is injured while working at your dealership, workers’ compensation insurance will help to cover their medical expenses and lost wages.
Similar to product liability insurance, it can also protect you from legal issues. All car dealerships should have this insurance in place due to the work environment. Heavy vehicles and machinery serve as hazards to everyone around, and even a mild incident could cause severe bodily harm.
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Auto Dealer Surety Bond
Also known as a fidelity bond, this type of coverage will protect you from losses that are caused by employees who steal from your dealership. Fortunately, workplace theft is not very common.
When it does occur, though, it can prove to be substantial. At a car dealership of any size, workers have access to many expensive auto parts. If property theft occurs undetected for a long period of time, you could lose a significant amount of money.
You could also run into productivity issues depending on the severity of the situation.
General Liability Insurance
As you might guess, this policy will protect your dealership from any claims that might arise from someone getting injured on your property. However, it is different from workers’ compensation insurance.
This coverage comes to effect when someone other than an employee gets injured on your property. This includes customers, third-party delivery workers, etc.
General liability insurance also covers property damage, copyright infringement, and slander. Due to how broad it is, you should never operate your business without it.
Commercial Auto Insurance
If you have company vehicles, you will need to insure them with a commercial auto policy. This will cover complications like accidents, theft, and vandalism.
That applies to more than conventional accidents, as well. For instance, let’s assume that an employee was operating a vehicle recklessly. If they damage another vehicle, property, or injure someone, this insurance will help manage the consequences.
Business Owner’s Policy
A business owner’s policy combines different types of coverage into one policy, which can save you money. It typically includes property insurance, liability insurance, and business interruption insurance.
You can mix and match these as you see fit in order to get the best results. Different car dealership owners will need different combinations. The best option for you will depend on the size of your dealership, the number of employees, and the total number of vehicles that you work with.
Choosing the Right Car Dealer Insurance Doesn’t Have to Be Difficult
In fact, the above information will help ensure that the process goes much smoother than you anticipate. Be sure that you keep these car dealer insurance tips in mind when choosing car dealer insurance so you can make the decision that’s best for your business.
Looking to learn other useful info about how you can make your business more successful? You can check out the rest of our blog for articles like this one.