While obtaining a standard commercial property insurance policy can cover some items, it often doesn’t encapsulate all the coverage that a car dealership will need throughout your time in operation. Car dealerships require more specialized policies.
Car dealerships are not required to insure each car on their lot. Rather, they are required to maintain overall coverage policies that encompass those vehicles as a part of their commercial property. Because of this, car dealerships must have several types of insurance policies in place to protect your business from unexpected property damage.
Some of the most common types of commercial insurance policies car dealerships need to protect against unforeseen damage include:
Commercial Property Insurance
All businesses should have commercial property insurance in place. There is always the possibility that a fire, theft and/or vandalism, flood, hail, or another disaster could cause damage to the business. With car dealerships where cars and trucks are often displayed outdoors, valuable inventory is left vulnerable to serious 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.
Dealer Insurance
Dealer insurance is a specialized type of business insurance that covers many facets of owning and operating a car dealership. Dealer insurance is designed to cover the test-driving of vehicles owned by the dealership, employees driving vehicles owned by the dealership, and the many potential calamities that could occur at the car dealership.
Dealer insurance encompasses many other specific types of coverage, including:
- Dealer’s Open Lot Insurance: This insurance offers coverage for the vehicles on a car dealership’s lot that are for sale. Further, this covers vehicles that may become damaged in a wreck or collision and can apply when a car is driven by an employee and/or by customers test-driving it. Dealer’s open lot insurance will also cover the dealership’s losses in certain cases of theft.
- Garage Keeper’s Insurance: This type of coverage insures vehicles owned by a customer leaving their vehicle for repairs against unexpected property damage. This includes coverage for fire damage, theft, vandalism, extreme weather, and collision damage that might occur on the dealership’s premises.
- Garage Liability Insurance: Often used interchangeably with garage keeper’s liability insurance, garage liability insurance 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.
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 during the repair process.
Business interruption insurance helps business owners stay afloat by covering the costs associated with lost revenue and payroll while a business is inoperable.
If you are an owner of a car dealership and you believe your insurer is attempting to delay, underpay, or deny a valid property damage claim, contact us today to see how we can help. At Raizner Slania, our experienced commercial property insurance attorneys can help to protect your business’s interests and investments in the event their insurance company is engaging in bad faith practices.