Tire Store Insurance Policy Information
Tire Store Insurance. Being the owner and operator of a tire store can be a lucrative business opportunity.
With an estimated 273.6 million vehicles on US roadways and given the fact that tires are a pretty vital component of cars, trucks, SUVs, motorcycles - and, well, every other type of vehicle out there - it's pretty safe to say that starting up a tire shop can be a smart investment.
Tire shops sell new and used tires and may repair or patch old tires for customers. Some do retreading, vulcanizing, or other tire repair. Most tire operations will install or replace one or more tires of customers' vehicles while also performing other services such as rotating all the vehicle's tires, alignments, and balancing.
The shop may stock auto accessories or offer other automobile repair services such as routine maintenance, oil and filter change, lubrications, and tune-ups.
Whether you're thinking about starting an independent tire shop to serve your local community or you're planning on launching a chain of stores, a lot of preparations need to be done. During all of the excitement and planning, there's a crucial element that you don't want to overlook: tire store insurance coverage.
Why is insurance so important for tire store owners? What type of policies will you need to carry? For more information about this critical part of your business operation, keep on reading.
Tire store insurance protects your business 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 accounting insurance questions:
- What Is Tire Store Insurance?
- How Much Does Tire Store Insurance Cost?
- Why Do Tire Stores Need Insurance?
- What Type Of Insurance Do Tire Stores Need?
- What Does Tire Store Insurance Cover & Pay For?
What Is Tire Store Insurance?
Tire store insurance is a type of insurance coverage that is specifically designed for tire retailers and related businesses.
This type of insurance provides financial protection against risks associated with the operation of a tire store, including liability for accidents and injuries, property damage, and loss or theft of tires and other merchandise. It may also cover risks related to the operation of vehicles and equipment used in the tire store, such as the risk of collision, theft, or damage.
The coverage provided by tire store insurance can vary depending on the specific policy, but it is usually designed to cover the specific risks associated with this type of business.
How Much Does Accounting Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small tire shops ranges from $37 to $69 per month based on location, services offered, payroll, sales and experience.
Why Do Tire Stores Need Insurance?
Just like any other business owner, as the proprietor of a tire shop, you're liable for anything that goes wrong - and in the world of business, a lot can go wrong. A display of tires could topple on top of a customer and she could sue you for the damages.
A piece of equipment could malfunction and injure an employee while he's putting tires on a vehicle. A fire could engulf your store in flames. A vandal could break into your shop and steal thousands of dollars in inventory.
A customer could claim that their vehicle was damaged because one of your employees didn't properly install them and file a lawsuit against you.
The above are just a few examples of the issues that could arise, and in each example, you would be responsible for any related expenses; medical bills, legal defense fees, damages, etc. As you can imagine, these expenses can be exorbitant.
If you're properly insured, instead of paying these expenses yourself, your carrier would cover them for you. In other words, tire store insurance can protect you from serious financial losses and could even potentially prevent you from losing your business.
What Type Of Insurance Do Tire Stores Need?
There are several types of insurance coverage that a tire shop should have in place. The specific type of coverage varies and depends on a number of factors that are unique business; where your operation is located, the size of your shop, and what type of services you offer, for example.
Since coverage needs vary, it's important to speak with a reputable commercial agent to determine exactly what type of polices you'll need to have in place in order to properly protect your business.
Regardless of the circumstances that are related to your individual business, there are some key tire store insurance coverages that all tire shop owners should have in place. Examples include:
- Commercial General Liability - This coverage protects you from third-part bodily injury and property damage liability claims. If a display of tires were to topple over onto a customer and she were to file a lawsuit against you for damages, commercial general liability insurance would cover the cost of your legal fees and any damages you are required to pay.
- Commercial Property - If your shop were to catch on fire, commercial property insurance would help to pay for any repairs that your building requires, as well as assist with paying for any inventory or other items that were damaged in your shop and need to be replaced. This policy covers the physical structure of your business, as well as the contents within it, from acts of nature (fires, storm damage, pipe bursts, etc.), as well as acts of vandalism and theft.
- Workers' Compensation - As an employer, you are responsible for providing your employees with a safe work environment. Should a piece of equipment malfunction and injure an employee, workers' comp insurance would cover his medical care. It would also compensate him for lost wages if he is unable to work as a result of his injuries.
The above-mentioned policies are just a few examples of the type of tire store insurance coverage you should consider.
Tire Shops' Risks & Exposures
Premises liability exposure is high due to the number of visitors to the shop. A customer waiting area should be provided for customers waiting on tires being installed and balanced.
All stock should be on shelves that are easily accessible to customers. 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. If customers are permitted to service their vehicles on premises, housekeeping and supervision are critical.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slip and fall. If the premises is open after dark, there must be adequate lighting and appropriate security for the area.
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.
The use of closed-circuit camera systems prevents such incidents from evolving into a "he said, she said" situation. Employees must be trained to deal with such delicate situations properly.
Products liability exposure is normally low unless the shop repairs vehicles or assists vehicle owners with their do-it-yourself repairs. If the shop directly imports or reconditions items for resale, the exposure will be that of a manufacturer.
The completed operations exposure for patching or reconditioning tires, brake turning or other service work must be considered due to the potential for an accident in the event of product failure.
Environment impairment exposure can be very high if the operation disposes of lubricants, oils, degreasers, solvents or batteries. 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 exposure is high due to lifting of tires and the use of a hoist for tire installation. Hoists must be well maintained and procedures in place to prevent vehicles from falling off. Brake turning, welding or other repair work must include appropriate safety equipment, especially eye protection.
Workers can slip and fall, or incur back injuries, hernias, sprains, strains 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 exposures can be 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. Tires do not catch on fire quickly; however, when they do burn, the fire is difficult to put out and an oily black smoke permeates the entire area.
Aerosols and flammable additives contribute to the overall fire load. Smoking must be prohibited. Additional ignition sources include electrical wiring, heating and air conditioning systems. All machinery and equipment must be inspected and maintained regularly to avoid wear and tear or overheating losses.
Tires and auto 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 quickly.
Inland marine exposures are from accounts receivable if the store offers credit, computers to monitor inventory, transact sales, and provide diagnostics, goods in transit if tires or auto 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. 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. All ordering, billing and disbursements must be handled as separate duties. Regular audits must be conducted.
Commercial auto exposure is generally limited to hired and non-owned for employees running errands. There may be a small fleet if there are multiple locations and the owner and managers travel between locations.
All employee drivers should have an appropriate driver's license and an acceptable MVR. All vehicles must be maintained with documentation kept. There should be written procedures for personal and permissive use of vehicles furnished to employees.
Garagekeepers exposure comes from damage that can occur to customers' vehicles while in the tire 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, with chains in place to prevent transport. Fences and other security also may be appropriate.
What Does Tire Store Insurance Cover & Pay For?
There are several reasons why tire stores may face lawsuits, including:
- Defective tires: If a tire store sells or installs a defective tire that causes an accident, injury or property damage, they may be held liable for the damages caused.
- Negligent installation: If a tire store improperly installs a tire, causing it to fail or malfunction, they may be held responsible for any resulting damages.
- Failure to warn: If a tire store fails to warn customers about potential risks associated with a tire, such as over-inflation or under-inflation, they may be held liable for any damages that result.
- Fraudulent practices: If a tire store engages in fraudulent practices, such as selling used tires as new, they may face legal action from customers who have been harmed by these practices.
- Breach of warranty: If a tire store fails to honor a warranty on a tire, they may be sued by the customer for breach of contract.
Insurance can help tire stores protect themselves from these types of lawsuits. Specifically, a commercial general liability insurance policy can provide coverage for legal fees and damages associated with claims related to bodily injury, property damage, and personal injury.
For example, if a tire store is sued for selling a defective tire that caused an accident, their insurance policy can help pay for the costs of defending against the lawsuit and any damages awarded to the injured party. Similarly, if a tire store is accused of negligent installation, their insurance policy can help pay for the costs of defending against the claim and any resulting damages.
In the case of fraudulent practices, the tire store's insurance policy may provide coverage for damages resulting from any legal action taken against them. Additionally, if a tire store is sued for breaching a warranty, their insurance policy may provide coverage for any damages awarded to the customer.
It's important to note that insurance policies can vary in terms of coverage and exclusions, so it's essential for tire stores to work closely with their insurance provider to ensure that they have adequate protection in place.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5531 Auto And Home Supply Stores
- NAICS CODE: 441320 Tire Dealers
- Suggested Workers Compensation Code(s): 8046 Automobile - Parts and Accessories NOC & Drivers, 8380 Automobile - Service or Repair Center & Drivers
Description for 5531: Auto And Home Supply Stores
Division G: Retail Trade | Major Group 55: Automotive Dealers And Gasoline Service Stations | Industry Group 553: Auto And Home Supply Stores
5531 Auto And Home Supply Stores: Establishments primarily engaged in the retail sale of new automobile tires, batteries, and other automobile parts and accessories. Such establishments frequently sell a substantial amount of home appliances, radios, and television sets. Establishments dealing primarily in used parts are classified in Wholesale Trade, Industry 5015. Establishments primarily engaged in both selling and installing such automotive parts as transmissions, mufflers, brake linings, and glass are classified in Services, Industry Group 753.
- Automobile accessory dealers-retail
- Automobile air-conditioning equipment sale and installation-retail
- Automobile parts dealers-retail
- Battery dealers, automobile-retail
- Speed shops-retail
- Tire dealers, automotive-retail
- Tire, battery, and accessory dealers-retail
Tire Store Insurance - The Bottom Line
To find out more about the specific types of tire store insurance policies you'll need, how much coverage your business should carry - speak with a reputable insurance broker.
AdditionResources For Retail Insurance
Read valuable small business retail insurance policy information. In a retail business, you need to have the right type of commercial insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
- Antique Dealers
- Appliance & Electronics Store
- Army Navy Surplus Stores
- Art Dealers
- Art Gallery
- Arts & Crafts Supply Stores
- Bicycle Shop
- Boat Dealers
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Cell Phone Stores
- Clothing Store
- Collectibles Memorabilia Store
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- Convenience Store
- Cosmetics Store
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- Dry Cleaning
- Embroidery Services
- Equipment Rental
- Fabric Stores
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- Funeral Home
- Furniture Store
- Gift Store
- Greeting Card Stores
- Hardware Store
- Harness & Saddle Shops
- Home Improvement Store
- Infant, Baby & Children's Clothing Stores
- Jewelry Store
- Lamp Stores
- Lingerie Store
- Luggage Store
- Meat Market & Butcher Shop
- Men's Clothing Stores
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pawn Shop
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- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Poultry Dealers
- Rent To Own Stores
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- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
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- Tire Store
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The retail industry is a vital sector of the economy, providing goods and services to consumers across the globe. It is also a sector that is constantly evolving, with new technologies and trends emerging on a regular basis.
Despite its importance, the retail industry is not without its risks. Retail businesses face a variety of threats, including theft, damage to property, and liability issues. These risks can have significant financial consequences for retail businesses, which is why commercial insurance is so important.
Insurance can provide retailers with protection against financial loss resulting from unforeseen events. For example, if a retail store is damaged by a natural disaster, insurance can help cover the cost of repairs and help the business get back on its feet. Similarly, if a retail employee is injured on the job, insurance can help cover their medical expenses and any lost wages.
In addition to protecting against financial loss, commercial insurance can also help retail businesses protect their reputation. If a retail business is sued or faces other legal challenges, insurance can provide financial support and legal representation. This can help to protect the business's reputation and maintain customer trust.
Overall, insurance is an essential component of a successful retail business. It helps to safeguard against financial loss and protect against potential legal challenges, which can be especially important for smaller businesses that may not have the resources to absorb these types of losses.
By investing in business insurance, retail businesses can ensure that they are well-equipped to handle the many challenges that come with operating in this dynamic industry.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Bailees Customers, Goods in Transit, Jewelers Block, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.