Last Updated: February 21, 2024, 12:54 pm by TRUiC Team

Car Wash Business Insurance

Getting insurance for your car wash business is essential.

Car wash businesses need to be protected against things like claims of property damage, premises liability, breach of contract, and employment disputes.

For example, a customer is injured on your car wash business’s premises, or one of the machines causes damage to customers’ cars.

We’ll help you find the most personalized and affordable coverage for your unique business.

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Car Wash Business

General liability insurance is — generally speaking — one of the most important insurance policies for car wash businesses. 

Some of the risks general liability insurance covers are:

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

Despite forming a central part of your car wash business’s protection, general liability is not normally the only policy that is used. Other commonly-used policies include:

  • Workers’ compensation insurance
  • Commercial property insurance
  • Commercial umbrella insurance
  • Commercial auto insurance

There are two general routes when it comes to finding a supplier from which to acquire insurance for your car wash business. These routes are:

  • Traditional brick-and-mortar insurers — Some of the US’s biggest firms fall into this category, including Hiscox, The Hartford, and Nationwide.
  • Online insurers — Includes newer firms that use AI and lower overheads to offer highly tailored insurance at far more affordable prices. Includes firms like Tivly and Next.

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Cost of General Liability Insurance

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

Compare the average cost of general liability insurance for a car wash business to other professional industries using the graph below.

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.

Graph showing average price of general liability insurance prices per industry

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Common Situations That General Liability Insurance May Cover for a Car Wash Business

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Example 1: A car wash customer steps out of his car and onto a slippery spot and falls, hitting his head on the ground and requiring medical treatment. He states that he will not file a lawsuit against your business, but he does demand that your business pays for his medical care. It is likely that your general liability insurance policy will pay for his medical treatment.

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Example 2: A customer’s car gets stuck in the automatic car wash. When the car wash starts up again, it is misaligned and proceeds to scrape up the customer’s car, ripping off his mirrors and antenna and leaving gouges down the side of the vehicle. The damage to your customer’s property would likely be covered by your general liability insurance policy.

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Example 3: When a customer gets his car back from your car wash and detailing team, he finds that there is damage to his vehicle. While your team says the damage was there before, the customer insists that it was not and goes so far as to file a lawsuit for damages. Your general liability insurance policy would pay for your legal fees, including for your attorney and any settlement if the case is settled out of court.

Other Types of Coverage Car Wash Businesses 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 of the most common types of coverage:

Workers’ Compensation Insurance

The state you do business in likely requires that you carry workers’ comp insurance if you have employees. The policy you get will ensure that your employees can get medical treatment if they are injured performing job-related duties. Not only will the policy pay for medical treatment, but it will also help cover lost wages for employees who cannot work while they recover from work-related injuries.

Commercial Property Insurance

It takes a considerable investment to purchase all the equipment necessary to open a car wash business. If you were to have to replace your equipment due to an unforeseen event, like a fire, it might be difficult or impossible to cover the cost all on your own. But with commercial property insurance, you could file a claim with your insurer and get money from your policy as long as the damage was caused by a covered event. With the money from your insurer, you could get new equipment and get your business back up and running as soon as possible.

Commercial Umbrella Insurance

In most cases, general liability insurance will cover your business when damages need to be paid. But there are situations—like if you were to lose a major lawsuit—where your general liability insurance policy limits could be exceeded. If this were to happen, you would have to pay the rest of the damages yourself. However, if you have an umbrella policy, it will pick up where the general liability insurance leaves off.

Commercial Auto Insurance

If you have a vehicle that you use primarily for business, you need to carry commercial auto insurance. Your state probably requires that you carry such a policy for all of your business vehicles. With a commercial auto policy, your company vehicle and its driver are covered in an accident. The policy will also pay for property damage and for medical care for any injured people.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your car wash business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Car Wash Business Insurance FAQ

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

A typical business owner’s policy includes general liability, business interruption, and commercial 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.

"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.

Yes, it is highly recommended. Your car wash business will be exposed to a plethora of risks from the get-go that will threaten its future success. Acquiring business insurance before operations commence is the best way of protecting your business from these risks.

It is also important to bear in mind that your car wash business may be legally required to hold certain forms of insurance in order to operate legally if it meets certain requirements.

Not necessarily. Certain exceptions may be written directly into your car wash business insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.