Auto Garage Insurance Michigan Policy Information
Auto Garage Insurance Michigan. Auto garages, also called automobile repair shops, play an essential role in helping any driver maintain their vehicle.
Automotive garages offer a wide variety of mechanical services for automobiles, motorcycles, or trucks, from ongoing maintenance to engine repair to tune-ups. The garage may be stand-alone or part of another business such as an automobile dealership or filling station.
They may specialize in a specific type of automotive repair, such as brakes or transmissions, or may service other types of motorized vehicles such as recreational vehicles or snowmobiles.
Some repair or rebuild parts such as brake drums, or custom-make old, difficult-to-replace parts. Operations may include gasoline or diesel fuel sales or retail sales of automobile accessories and tools. Normally, automotive garages perform body work or painting only when incidental to other repairs.
Many MI auto garages, staffed by skilled and versatile auto mechanics, are able to repair malfunctions and other problems related to both the mechanical and electrical components seen in different types of vehicles, as well as performing the regular scheduled maintenance that keeps cars running smoothly and safely. Others specialize in certain aspects of car repair, such as brakes or transmissions.
Whether you already own and manage an auto garage or are, perhaps, currently a mechanic thinking about starting your own business, you will already know that auto garages never run out of customers; the car repair industry is a reliable one.
Auto garages still, however, face numerous threats, and any working day may be one during which your business is met with unexpected circumstances.
What kinds of auto garage insurance Michigan might be needed to protect against devastating financial consequences if something goes wrong? Learn more in this brief guide.
Auto garage insurance Michigan protects your shop from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Why Do Michigan Auto Garages Need Insurance?
Regardless of the steps you take to keep your business safe, auto garages are, like any other business, vulnerable to a range of perils. Although you will be able to handle the costs associated with minor mishaps on your own, catastrophic events can easily prove to lead to such massive expenses that they threaten the very future of your auto garage.
Threats that have the potential to severely damage your garage and the valuable equipment and inventory inside include acts of nature (such as earthquakes and hailstorms), burglary, vandalism, and accidents such as unintended fires.
Lawsuits pose another realistic threat to your auto garage, however. Should a car that you repaired be involved in an accident, and it is alleged that your professional negligence played a role in causing it, the resulting expenses can be truly overwhelming.
In the event that you inadvertently cause damage to a customer's vehicle, you can again expected to be burdened with costs. Workers, too, may be injured on the job and attempt to hold you liable, even if their own negligence caused the injury.
To protect yourself from the financial fallout of these and other major perils, it is absolutely vital to invest in the right types of auto garage insurance Michigan coverage. Armed with this protection, your business will recover from disastrous events in no time.
What Type Of Insurance Do MI Auto Garages Need?
Your auto garage is unique - and your business will benefit most from a custom-made comprehensive insurance plan. Factors like the location of your garage, the number of employees you have, the exact scope and nature of your activities, and the value of your equipment all influence your insurance needs.
Because one size does not fit all, you are strongly advised to consult a seasoned commercial insurance broker. With that in mind, some of the core types of auto garage insurance Michigan that are needed:
- Commercial Property: Your garage, the tools and equipment inside, and your inventory could all sustain heavy losses if you are impacted by an act of nature, burglarized, or hit by an act of vandalism. Commercial property insurance will help you cover the costs.
- Garage Liability: A niche form of commercial liability insurance, this type of auto garage insurance Michigan coverage exists to allow you to recover from mishaps on your premises or caused by your activities in which a third party is injured or severe property damage occurs. Both your attorney fees and any settlement costs are covered.
- Garage Keepers: This kind of insurance safeguards your business if a customer's vehicle is damaged while it is in your care, by taking care of the expenses that follow.
- Workers Compensation: Auto garages that employs workers needs to carry workers' comp insurance, which covers the medical bills and any lost wages of employees who sustain work-related injuries. In the process, having this insurance also greatly reduces the risk that an injured employee will sue your auto garage.
These essential forms of auto garage insurance Michigan coverage will go a long way toward protecting any garage from severe financial losses if they are affected by a major peril.
Because your MI garage may have additional insurance needs, however, it is important to talk your risk profile through with a commercial insurance broker who understands your branch of commerce.
MI Auto Garage's Risks & Exposures
Commercial auto exposures may be limited to hired and non-owned for employees running errands to pick up needed supplies. If there are owned vehicles, all employee drivers should have an appropriate driver's license and their MVRs should be regularly checked. There should be written procedures for personal and permissive use of vehicles furnished to employees.
All vehicles must be regularly maintained with records retained. Towing presents a more serious exposure due to the potential for damage to the vehicles being towed. All tow truck drivers must be experienced. Towing vehicles must be regularly checked, particularly the hoists and tow bars.
If vehicles are rented to customers, the garage should keep a copy of the renter's driver's license and proof of insurance. The rental contract should identify all drivers and state that unlisted, unlicensed, or minor drivers are not permitted to operate the vehicle. It should also include a hold-harmless agreement in which renters agree to assume responsibility for the operation of the vehicle to limit the garage's exposure to vicarious liability only.
If a collision damage waiver is offered, the customer's signature is needed to document whether this was purchased or declined. The customer should also be required to sign a pre-inspection form to minimize disputes when the vehicle is returned with damages.
Vehicles that are rented should be inspected and reconditioned before being rented again.
Garagekeepers exposure comes from damage that can occur to customers' vehicles while in the repair shop's care, custody and control. Keys to customers' vehicles should be kept in a locked box to prevent unauthorized use. Proper identification should be required to prevent handing a customer's car to the wrong owner.
Lots must be well lighted with chains in place to prevent transport. Fences and other security also may be appropriate.
Premises liability exposure is high due to the number of visitors to the garage. Waiting areas should be provided for customers waiting on repairs. Customers must not be permitted in the garage area. To prevent slips and falls, floor coverings should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring.
Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure. There should be a disaster plan in place for unexpected emergencies. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
If the premises is open after dark, there must be adequate lighting and appropriate security for the area. Cars in the parking lot present an attractive nuisance hazard. Chains may be required to prevent entrance after hours.
Personal injury exposures include allegations of discrimination and from apprehending suspected shoplifters, which may result in claims of assault and battery, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises.
Products liability exposure can be high due to the potential for an accident in the event that a vehicle is not properly repaired. There should be a check-off procedure in place prior to release of the vehicle to the customer to prevent its return with any vital functions not working properly.
If the garage directly imports or reconditions items for resale, the exposure increases to that of a manufacturer.
Environmental impairment exposures can be very high due to the disposal of used lubricants, oils, degreasers, solvents, batteries, and tires. Spillage and leaking of pollutants into the air, ground, or water can result in high cleanup costs and fines.
Adequate procedures should be in place and must be followed to prevent any leakage or contamination. Contracts should be in place to dispose of all environmentally dangerous chemicals.
Workers compensation exposures are very high. Brake turning, welding or other repair work must be handled only when appropriate safety equipment, especially eye protection, is available. Lifting of a vehicle by hoists, jacks, and other mechanical means can result in injury should the equipment malfunction. Hoists must be well maintained and procedures in place to prevent vehicles from falling.
Workers can slip and fall, or incur back injuries, sprains, strains or hernias from lifting. If the shop sells batteries, leakage or spilling of battery acids can cause burns on contact with skin and respiratory problems when inhaled.
Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. Employees performing maintenance or repair work on customers' vehicles should be properly trained.
Property exposure is high due to flammables such as lubricants, oils, degreasers, and solvents used in the repair operations. They must be properly labeled, separated, and stored away from combustibles. Aerosols and flammable additives contribute to the overall fire load.
Welding needs to be evaluated for proper handling of the tanks and gases, as well as adequate separation from the other operations with either a separate room or flash/welding curtains.
Tires do not catch on fire quickly; however, when they do burn, the fire is difficult to put out and an oily smoke permeates the entire area. Smoking must be prohibited.
All machinery and equipment must be inspected and maintained regularly to avoid wear and tear or overheating losses.
Vehicle parts are target items for thieves. Appropriate security controls must be taken including alarms, lighting, and physical barriers prohibiting access to the premises after hours. Premises alarms should report to a central stations or police department after hours.
Equipment breakdown exposure is high as the business is dependent on its machinery for conducting operations. Replacement parts may be difficult to obtain on a timely basis.
Inland marine exposures are from accounts receivable if the garage offers credit, computers to monitor inventory and for diagnostics, goods in transit if parts are delivered to customers, and valuable papers and records for customers' and vendors' information.
Backup copies of all records, including computer records, should be made and stored off premises.
Crime exposure is high for both employee dishonesty and theft of money and securities. Background checks should be conducted on all employees. The inventory must be under the supervision of more than one individual so that there are checks and balances. All ordering, billing and disbursements must be handled as separate duties. Regular audits must be conducted.
Money should be regularly stripped from the cash drawers and placed in a safe away from the front door. Irregular drops should be made to the bank to prevent a substantial accumulation of cash on the premises.
Auto Garage Insurance Michigan - The Bottom Line
To protect your operation, employees and customers, having the right auto garage insurance Michigan coverage is vital. To see the options are available to you, how much coverage you should invest in and the cost - speak to a reputable commercial insurance broker.
Michigan Economic Data And Business Insurance Requirements
Business owners who are interested in establishing operations Michigan must have a thorough understanding of the state's economy. They should also familiarize themselves with any regulations and limits that state may have in place for commercial insurance.
Any entrepreneur who is thinking about starting a business in the Great Lake State first needs to determine if it's a feasible location for business operations. As such, it's important to have a keen understanding of pertinent details regarding the economy of Michigan, in addition to the types of insurance coverage that are mandatory for corporations that operate within the state.
Economic Trends for Businesses In Michigan
After a long period of stagnant job growth in the early part of the 21st century, MI has been experiencing a steady increase in employment gains. Between 2009 and 2018, the state has enjoyed a period of uninterrupted job growth; the longest stretch of job growth since World War II. According to economists at the University of Michigan. While there has been a slight decline in the rate of job growth, job creation continues and forecasters say will continue for the next two years, into 2021.
In 2018, an estimated 55,200 jobs were created; in 2019, it's expected that 35,800 jobs will be created, and in 2020, economists believe that there will be a total of 39,300 jobs created in Michigan. While that rate of growth is 1.9 percent slower than the job growth rate between 2011 and 2016, it is still a steady increase overall. In total, approximate 683,200 jobs will be created in MI between 2099 and 2020; almost four out of the five jobs that were lost during the early part of the 21st century will be recovered.
While the unemployment rate has steadily improved, it is still above the national average. In March of 2019, the national unemployment rate was 3.8 percent, while in the state of Michigan, it was 4.0 percent. Mid-Michigan has experienced the largest growth rate in the state, and according to forecasters, it looks like that trend will continue, moving forward. Industries that are expected to see the most growth include:
- Energy, due largely to research and development in clean energy
- Food and agriculture
- Transportation and mobility
- Healthcare industry
- Information and technology
In the state of MI, business owners are not legally required to carry liability insurance; but most entrepreneurs opt to invest in a General Liability or Business Owner's Policy (BOP). A commercial auto insurance policy is also required for any businesses that use motor vehicles to conduct any aspect of their business operations. Workers' compensation insurance is also required for any businesses with non-owner employees. While the following forms of coverage are not required, depending on the type of business you operate, they are recommended:
- Data breach insurance
- Business income insurance
- Commercial Umbrella insurance
Additional Resources For Auto Service & Repair Insurance
Read useful small business auto service and repair insurance policy information. In an aotu related business, you need to have the right type of commercial insurance coverage so that your garage, employees, and customers vehices & other property is protected.
- Auto Dealers
- Auto Detailing & Mobile Car Wash
- Auto Dismantlers
- Auto Garage
- Auto Glass Repair Shops
- Auto Paint Shops
- Auto Service Repair
- Auto Supply Parts Store
- Car Rental
- Car Wash
- Gas Station
- Motorcycle Dealers
- Parking Lot
- RV Dealers
- Snowmobile Dealers
- Truck Rental
- Used Car Dealer
There is a Auto Service Risks Program is an enhancement of the Commercial Package Policy that is available to certain Auto Service Operations.
Automobile repair shops and garages offer a wide variety of mechanical services, from engine repair to tune-ups. The operation may be stand-alone or be part of another business such as an automobile dealership or filling station.
Gasoline stations are normally limited to the dispensing of gasoline, kerosene, diesel or fuel oil with incidental sales of auto accessories and pre-packaged snack food items. Larger gasoline stations may offer other services, such as auto repair, retail sales of food or auto parts, snack bar or restaurant, propane tank exchange, towing, or baths and overnight lodging facilities for truckers.
Car washes provide facilities for cleaning automobiles and other motor vehicles. Some are drive-through with either partially or fully automated conveyance of the vehicle throughout the operation. Hand washing, waxing, or interior cleaning of the vehicle may be offered, with customers sent to a waiting area. Damage to the customers' vehicles is the primary exposure as machinery and washes can break antennas, pull off stripping, crack glass and damage tires.
The three basic types of risks that are contemplated by the Auto Service Risks Program include:
- Repair Shops - operations primarily engaged in auto repair. This includes shops that do body, fender, radiator, ignition service and paint work.
- Service Stations- operations primarily engaged in servicing autos. The sale and installation of auto accessories are a part of this category as long as major engine or bodywork is not performed. Car wash facilities are eligible.
- Storage garages and other parking places.
The following classifications are specifically listed as eligible: Automobile:
- Quick Lubrication Services
- Repair or Service Shops
- Repair Shops–Self Service
- Car Washes–self-service and full-service
- Convenience Food/Gasoline Stores–self-service, full-service and combined
- Gasoline Stations–self-service, full-service and combined
- Parking–public-open air and not open air
Automobile, motor home, mobile home, trailer, and motorcycle dealers are NOT eligible for this program.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Environmental Impairment, Underground Storage Tank Liability, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Computer Fraud, Forgery, Goods in Transit, Cyber Liability, Employment-related Practices, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.
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Also find Michigan insurance agents & brokers and learn about Michigan small business insurance requirements for general liability, business property, commercial auto & workers compensation including MI business insurance costs. Call us (313) 344-7177.