Business Insurance for Car Detailing Business

Compass needle pointing towards blue insurance logo

Business insurance is designed to protect a business owner’s financial assets and is an essential investment for car detailers.

 

Recommended action box icon

Already know what you’re looking for? Find out how much the right coverage will cost you right now.

Get a Free Quote

About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.

COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR CAR DETAILERS

Example 1: In your specialized business, your workers rely heavily on large equipment to assist in the detailing process. If a customer wanders into the garage to check on their car as it sits on the lift, they could be burned, scraped, or slip and fall on tools on the floor. In this line of work, it's nearly impossible to prevent every possible accident from ever taking place. Luckily, general liability coverage can step in to help cover damages if you're sued by an injured customer.<\/em><\/p>

Example 2: If you're working in a busy garage and one car rolls back into another, it could cause thousands of dollars in damages to both vehicles. While minor scrapes and dings can easily be paid for out-of-pocket, you don't want to be stuck paying for serious damages. Large-scale property damage to a third party's property should be covered by your comprehensive general liability policy.<\/em><\/p>

Example 3:  While it’s important to employ a team that takes workplace safety seriously, in the car detailing business, a wide variety of cleaning solutions and oils are used to make each car look it’s best. If a car detailing product is spilled or not cleaned properly, there is a risk for employees to slip and fall. With general liability insurance, you can rest easy knowing that most accidents, damages, and bodily injury situations are covered in case of a lawsuit.<\/em><\/p>

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

COST OF GENERAL LIABILITY INSURANCE

The average car detailer business in America spends between $450-$1,000 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Recommended action box icon

How much will the right insurance cost you?

Find what business insurance will cost for your business right now

Get a Free Quote

OTHER TYPES OF COVERAGE CAR DETAILERS NEED

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance car detailers should obtain:

Garage Keepers Liability

Depending on the services you offer, it may be necessary to store customer vehicles on-site for several hours or even overnight. If a customer’s car is vandalized or stolen while on your property and you don’t have proper insurance, you could be held responsible for damages and left to repair or replace the vehicle by paying out-of-pocket.

Workers’ Compensation Coverage

Most business types must carry workers’ compensation insurance if they have any part-time or full-time employees. If an employee becomes sick or injured on the job, this type of insurance coverage works to cover their lost wages and related medical bills. Working with vehicles is a serious and potentially dangerous business, which is why it’s so important to make sure that your team is adequately covered in the event of an accident.

TYPES OF COVERAGE SOME CAR DETAILERS MAY NEED

In addition to the policies outlined above, there are a few other types of coverage your car detailer business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Commercial Auto Insurance

If your car detailer shop offers loaner vehicles to your customers or you use your own service vehicles, you are most likely required to invest in commercial auto coverage. Any vehicles that are used solely for business purposes should be covered under a commercial auto insurance policy to help protect your employees, customers, and your bottom line in the event of an accident.

Commercial Umbrella Liability

Whenever a business involves working on and around vehicles, there are a number of different risks to protect against. In fact, it is common for the expenses associated with accidents in these high-risk workplaces to exceed the limits of a primary insurance policy. With the help of commercial umbrella liability insurance, you can supplement your primary coverage for additional protection.

ADDITIONAL STEPS TO PROTECT YOUR BUSINESS

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

 

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.

FREQUENTLY ASKED QUESTIONS

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.