Insurance for Auto Detailing & Mobile Auto Detailing Businesses

If you plan to open an auto detailing business with a stationary location or start a mobile auto detailing business it is important to have insurance to protect your business and your personal assets. This type of insurance is really not that expensive. If you are properly insured an unforeseen event occurs it could put you out of business and you could very quickly lose your personal assets.

The most popular insurance for these types of businesses is called Garage Keepers Liability Insurance. Even if you own a mobile detailing business this is the type of policy that you want to have. You want to be covered while you are working on a vehicle and while the vehicle is in your possession. When getting a quote for a policy premium you want to also be sure you are getting coverage for moving, picking up and delivering the vehicles you will be working on. Even if you plan on opening a mobile detailing business you still need coverage for moving customer’s vehicles even if you are only moving a vehicle from the customer’s garage to their driveway. You never know what could happen!

You will also want to have your equipment insured against theft. Pressure washers, carpet extractors, vapor steamers, buffers, polishers, compressors and generators are not cheap and it is critical to insure them. The cost to insure this type of equipment is not very expensive at all so it is a “no brainer” to have it included with your policy premium. Usually you will get a quote for a minimum of $100,000 of liability coverage. Typically you want to get quoted on $300,000, $500,000, and a million dollar umbrella policy as well. Believe it or not the premium cost is not that much more for $500,000 worth of coverage versus only $100,000 of coverage. People are “lawsuit happy” today and you can’t afford to be “underinsured.” Most good Garage Keepers Liability policy packages cover the vehicle you are working on against damage and theft, coverage for your equipment, and coverage for pick up and delivery of any vehicle.

If you are operating a mobile detailing business your premium costs will be lower than if you are operating out of a shop. You will incur higher premiums operating from a stationary location due to needing coverage for fire, vandalism, signage, glass, and usually more property contents that a mobile detailing operation. If you lease a building, your landlord’s insurance company will want specific values of equipment and assets that will be covered. A typical premium for $500,000 worth of coverage for a mobile detailing operator is about $1800 per year or $150 per month. Most agencies require a 20% down payment to start the policy. If you plan to operate your business at a stationary location, your premium costs will probably be up to 25% higher.

If you plan on having employees you will most likely have to pay Workman’s Compensation insurance. This will protect you and your employee in the unlikely event that an injury occurs while working on the job. Your insurance agent can quote you for this too. In many cases for small businesses your state may actually provide you Workman’s Compensation Insurance. Be sure that your business is “rated” properly from the beginning. You are not a repair shop or mobile repair business so be sure that they do not rate you that way. If you are rated this way your Workman’s Compensation rates will be very high and it will take a long time to get your rating changed. Most auto detailing businesses that have employees are rated as “auto laundry” for Workman’s Compensation Insurance. Auto Laundry is one rating above car washing but few levels below auto repair. Have your agent give you a quote on this insurance too. If you are the only individual and have no employees you may not need Workman’s Compensation Insurance. You must check with your state or insurance agency to find out what you need to be properly insured from a legal standpoint. This article is intended to give you a good overview of what you should consider and look for with regards insurance in the auto detailing industry. It is up to you to do your homework and make sure that you are properly insured.

You should get at least 2 or 3 quotes and compare costs and coverage. It is not a bad idea to contact an insurance brokerage house that deals with many different carriers. You want a carrier with an A+, A, or A- rating. Typically the insurance carriers that write these types of premiums are also writing premiums for body repair shops, car washes, limousine companies and other automotive types of businesses. Start with your personal insurance company and see if they can give you a competitive quote. If they cannot, they should be able to refer you to an agency that can. You should “shop” your policy every 2-3 years by getting quotes from different insurance companies. This will keep your insurance agent honest and help protect you from paying too much. There are many companies that will write Garage Keepers Liability policies at competitive rates. Fireman’s Fund, American States, Travelers, State Farm, American Fire, and Ohio Casualty are a few that I’ve heard have experience with and offer competitive rates for auto detailing and mobile auto detailing business policies.

As your business grows, your insurance coverage needs will change. You may need additional coverage when working at airports, parking structures, parking lots of office buildings, condo properties, and car dealerships. As a mobile detailing operator you should always have a copy of your policy in your mobile rig just in case a property manager wants to confirm that you have the correct amount of coverage to be working at the particular commercial property. As you hire employees be sure to have your insurance carrier check their driving record before you put them behind the wheel of a customer’s vehicle. If they have a poor driving history you may not be able to extend an employment offer to them, or not allow them to move any of your customer’s vehicles. Your own driving record can also plan an important role with regards to the cost of your insurance premium. Please contact me if you have any questions about this article.

Nick Vacco

www.DetailKing.com

09:25 - 2009-Feb-5