Running a car dealership is hard work- from the long hours at work, to the costs of keeping the business running smoothly.   There are also many different risks you and your employees face.

What if someone breaks into your dealership and steals several cars? What if you experience an unexpected flood or fire and your building or merchandise is damaged? What if someone trips while touring your showroom, and takes legal action against you as a result?

The risks associated with not having insurance could cost you much more in the long run. That’s why having the appropriate coverage is so important. Here are five coverage options you may want to consider, so that you can operate your business worry-free.

Commercial General Liability Insurance

Commercial general liability insurance, or CGL for short, is the foundation of any liability insurance program for business owners.

Essentially, if something goes wrong on your premises, like a customer slips on some ice while entering your building and injures themself, you could be held responsible and find yourself dealing with a costly lawsuit. CGL insurance is designed to protect business owners if they’re found legally liable for bodily injuries or property damage to a third party.

At Federated, our CGL policies include:

  • Bodily injury/property damage liability
  • Personal and advertising injury liability
  • Employee benefit program liability
  • Coverage for medical payments

Commercial Property Insurance

You don’t just have to worry about selling cars. You also have to be prepared for the possibility of fire, theft, and vandalism.

For example, a fire at a car dealership in Pickering in April 2021 required the full response of the city’s fire department. They reported that an estimated 300 tires, vehicles on hoists, and fluids such as oil caused the fire to spread. A number of vehicles were lost to the fire and the damage to the building was extensive.

Businesses can and should take precautions against these risks by doing things like increasing security measures, preparing employees for an emergency situation, and having the necessary equipment on hand to deal with a fire. But these steps aren’t always enough.

Commercial property insurance can help protect physical assets such as equipment, buildings, inventory, and third-party property. It can also help you replace stolen property and cover some of the costs associated with theft.

New Vehicle Sales Protection

You can’t please everyone. Despite your best efforts, occasionally the new equipment you sell to customers may fall short of their quality standards.

This coverage can help protect your business in a situation where customers aren’t completely satisfied. We provide coverage for a claim filed by a customer who’s dissatisfied with the vehicle they purchased from you.

Mechanic’s Warranty of Work

We’re all human, so sometimes human error is only natural. However, the cost to redo those mistakes can be greater for some than others, especially if you’re running a car dealership where repairs are done on people’s vehicles.

Protection is available for mistakes made during the installation of a defective part or as a result of faulty work on customers’ vehicles. For example, say a customer brings their car in to have the steering wheel replaced and your mechanics do just that. But a few days later, the customer finds their steering wheel is not functioning properly again. Worry not! Mechanic’s warranty of work may cover that.

Business Interruption Insurance

Most standard insurance policies only cover loss or damage to tangible items (like your equipment, inventory, and building), but they don’t cover lost profits if an unexpected event sidelines your operations. So, for instance, if your car dealership is vandalized, your policy may cover the cost of repairing the damage. But you may still lose profits if you have to remain closed during business hours in order to fix the damage.

That’s where business interruption insurance comes in. If the worst should happen, you can collect the income you would have expected to generate were it not for the disruptive event. This can really help protect your business from a loss of income.

Most standard insurance policies only cover loss or damage to tangible items, but business interruption insurance covers lost profits if an unexpected event sidelines your operations.

Protect your business

You’ve got a lot to consider while running a business. At Federated, our team of specialists have the expertise you need to help in your risk management and business continuity planning. Get started by visiting our insurance solutions for auto dealers page today!

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.