Auto Paint Shop Insurance Policy Information
Auto Paint Shop Insurance. Custom paint jobs, classic car restorations, collision repairs; as an auto body paint shop, you offer an invaluable service. Your customers rely on you to improve the appearance of one of their most prized possessions: their cars.
Automobile paint shops paint, rustproof, or coat vehicles or vehicle parts. They are not involved in mechanical repair work. The shop may offer custom paint jobs based on customers' designs.
From selecting the proper colors to using the highest quality paints, and from using the most advanced techniques and to employing the most state-of-the-art technologies, you always go the extra mile to ensure that you meet the needs and exceed the expectations of your clients.
Of course, you also take extreme care to make sure that their property is well-protected when it is in your possession. However, despite your best efforts, you never know when something can go wrong, and when it does, you could be held liable and may be responsible for some pretty steep costs.
In order to protect yourself, your clients, and your employees from the unexpected, investing in the right type of auto paint shop insurance is an absolute must. Why is insurance so important? What type of coverage do you need? For an overview of auto body paint insurance, keep on reading.
Auto paint shop insurance protects car and truck painting businesses from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked auto body painting insurance questions:
- What Is Auto Paint Shop Insurance?
- How Much Does Auto Paint Shop Insurance Cost?
- Why Do Auto Paint Shops Need Insurance?
- What Type Of Insurance Do Auto Paint Shops Need?
- What Does Auto Paint Shop Insurance Cover & Pay For?
What Is Auto Paint Shop Insurance?
Auto paint shop insurance is a type of insurance that is designed specifically for auto paint shops and provides protection for the risks and liabilities associated with this type of business. This insurance typically covers the costs of damages or injuries that occur as a result of the work performed in the paint shop, such as damage to vehicles, injuries to employees or customers, and damage to equipment or the shop itself. It may also provide protection against claims related to environmental damage or pollution.
How Much Does Auto Paint Shop Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for auto paint shops ranges from $37 to $69 per month based on location, size, revenue, claims history and more.
Why Do Auto Paint Shops Need Insurance?
Just like business owners in any industry, as the owner and operator of an auto body paint shop, you're exposed to a variety of risks. Some of those risks are similar to those that all business owners face, while others are unique to your particular industry.
Examples of some of the different risks that are associated with running an auto body paint shop include:
- Third-party bodily injury and property damage lawsuits and settlements
- Commercial property damage
- Employee accidents and injuries
- Lawsuits from clients who claim you damaged their vehicles while they were in your possession or that you made a mistake with the services you provided
- Accidents with your commercial vehicles
The above are just some of the risks that auto body paint shops are exposed to, and as the owner and operator of the business, if something goes wrong, you're responsible for the related costs.
Without auto paint shop insurance, the burden of those expenses will fall directly on your shoulders; however, if you are properly insured and something goes wrong, your insurance company will help to cover the costs of the associated expenses.
In other words, commercial insurance can help to protect you from unexpected and exorbitant expenses and serious financial hardship.
What Type Of Insurance Do Auto Paint Shops Need?
There are several different types of coverage that auto body paint shops should invest in.
While the specific type of coverage that's needed varies and depends on several factors, including where your business is located, the size of your shop, and the specific services you offer, there are certain types of coverage that all auto body paint shops should have. Examples of the most essential types of auto paint shop insurance coverage include:
- Commercial Property: With this insurance, the physical structure of your auto body paint shop, as well as the contents within it and some of the exterior structures, will be protected from damages or losses that are caused by acts of nature, theft, or vandalism. For instance, if a thief were to break into your shop and steal equipment, commercial property insurance would cover the cost of the damages that need to be repaired, as well as the equipment that would need to be replaced.
- General Liability: This type of auto paint shop insurance coverage protects your business from third-party physical or personal injury or property damage claims. For example, if a vendor delivering an order were to trip and fall over a piece of equipment on your commercial property and they were to file a lawsuit against you, this insurance would help to pay for your legal defense fees, as well as any costs that you may be found responsible for.
- Workers Compensation: If you have employees will most likely need to carry workers comp insurance. In the event that an employee suffers a work-related accident or injury, in circumstances that indicate your company could be held liable, it covers the employee's medical expenses along with wages lost to related work absences.
- Commercial Auto: Any business that uses vehicles over the course of its activities will further need commercial auto insurance. It covers both property damage (to third party vehicles) and bodily injury relating to the business use of your cars or other vehicles.
The above are just three of the types of auto paint shop insurance coverage needed. For more information and to find out how to properly protect your business, consult with an experienced and reputable commercial insurance agent.
Auto Paint Shop's Risks & Exposures
Commercial auto exposures are generally 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 appropriate driver's licenses and their MVRs 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.
Garagekeepers exposure comes from damage that can occur to customers' vehicles while in the paint shop's care, custody and control. Keys to customers' vehicles should be kept in a locked box to prevent unauthorized access. Proper identification should be required to prevent handing a customer's car to the wrong owner. Lots must be well lighted, and chains should be in place to prevent transport. Fences and other security also may be appropriate.
Premises liability exposure is moderate due to the number of visitors to the shop. Customer waiting areas should be provided. Customers must not be permitted in the service 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.
Environmental impairment exposures can be very high due to disposal of waste paints, solvents and other hazardous or toxic substances. A 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 can be high. 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.
Fumes and vapors from the painting operations can cause respiratory problems or contact dermatitis. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting.
Property exposure is high due to the use of flammable paints, chemicals, and solvents in painting operations. These must be properly labeled, separated, and stored away from combustibles. Aerosols and flammable additives contribute to the overall fire load. Painting, coating, and rustproofing should be in spray booths with good ventilation, UL-approved wiring and fixtures and adequate controls.
If part of the operation, 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.
Inland marine exposure comes from accounts receivable if the paint shop offers credit, computers to monitor inventory and assist in paint mixing and application, 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. 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.
What Does Auto Paint Shop Insurance Cover & Pay For?
Auto paint shops can be sued for a variety of reasons, including:
- Poor workmanship: If an auto paint shop performs substandard work, resulting in damage to a customer's vehicle, they may be sued for negligence.
- Property damage: If an auto paint shop causes damage to a customer's property while performing services, such as accidentally scratching the car or spilling paint on the floor, they may be held liable.
- Bodily injury: If a customer or employee is injured on the premises of the auto paint shop, the shop may be sued for negligence.
- Breach of contract: If an auto paint shop fails to perform services according to the terms of a contract, they may be sued for breach of contract.
Insurance can protect auto paint shops from the financial damages of these lawsuits. Here are some ways insurance can help pay for the lawsuit:
General liability insurance: This type of insurance can help cover damages resulting from bodily injury or property damage. For example, if a customer's car is damaged due to poor workmanship, general liability insurance can help cover the cost of repairs.
Professional liability insurance: This type of insurance can help protect against claims of negligence or poor workmanship. If a customer sues an auto paint shop for poor workmanship, professional liability insurance can help cover legal fees and damages.
Property insurance: This type of insurance can help cover the cost of property damage caused by events such as fire, theft, or vandalism.
Workers' compensation insurance: This type of insurance can help cover the cost of medical expenses and lost wages if an employee is injured on the job.
Overall, insurance can help protect auto paint shops from the financial burden of lawsuits and provide peace of mind to business owners.
Commercial Insurance And Business Industry Classification
- SIC CODE: 7532 Top, Body, And Upholstery Repair Shops And Paint Shops
- NAICS CODE: 811121 Automotive Body, Paint, and Interior Repair and Maintenance
- Suggested Workers Compensation Code(s): 9505 Automobile, Bus, Truck or Trailer Body Manufacturing - Painting
Description for 7532: Top, Body, And Upholstery Repair Shops And Paint Shops
Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops
7532 Top, Body, And Upholstery Repair Shops And Paint Shops: Establishments primarily engaged in the repair of automotive tops, bodies, and interiors, or automotive painting and refinishing. Also included in this industry are establishments primarily engaged in customizing automobiles, trucks, and vans except on a factory basis. Establishments primarily engaged in customizing automobiles, trucks, and vans on a factory basis are classified in Manufacturing, Industry Group 371.
- Antique and classic automobile restoration
- Automotive body shops
- Automotive interior shops
- Automotive paint shops
- Automotive tops (canvas or plastic), installation, repair, or sales and
- Automotive trim shops
- Bump shops (automotive repair)
- Collision shops, automotive
- Customizing automobiles, trucks or vans: except on a factory basis
- Upholstery repair, automotive
- Van conversions, except on a factory basis
Auto Paint Shop Insurance - The Bottom Line
To protect your business, employees and customers, having the right auto paint shop insurance coverage is essential. To see what options are available to you, how much coverage you should invest in and the premiums - speak to a reputable commercial insurance agent.
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
The auto service and repair industry is an essential part of the transportation sector, responsible for maintaining and repairing vehicles to keep them running smoothly and safely. However, this industry also comes with inherent risks and liabilities, which is why commercial insurance is necessary to protect both the business and its employees.
First and foremost, the auto service and repair industry deals with hazardous materials and equipment on a daily basis. There is a risk of accidents and injuries occurring in the workshop, and insurance can provide financial protection in the event of a workplace accident or injury.
Additionally, the auto service and repair industry is subject to the risk of property damage. There is a potential for damage to vehicles in the workshop, as well as damage to the business' own property, such as tools and equipment. Business insurance can cover the costs of repair or replacement in the event of such damage.
Furthermore, the auto service and repair industry is vulnerable to liability claims from customers. If a customer's vehicle is not repaired properly, it can result in further damage or accidents on the road, leading to liability claims against the business. Insurance can provide coverage for these types of claims, protecting the business from financial loss.
In conclusion, the auto service and repair industry needs commercial insurance to protect against the risks and liabilities inherent in this line of work. Without insurance, businesses in this industry would be vulnerable to financial loss and legal action, which could ultimately lead to their failure.
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.