Last Updated: February 21, 2024, 3:59 pm by TRUiC Team

Driving School Business Insurance

Getting insurance for your driving school is essential.

Driving schools need to be protected against claims arising from things like false advertising, contractual breaches, and negligence.

For example, a failed student claims you falsely advertised passing grades for all attendees, or an instructor is found to have been the cause of an auto accident during a lesson.

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 Driving School Business

General liability insurance is — generally speaking — one of the most important insurance policies for driving schools. 

Some of the risks general liability insurance covers are:

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

Your driving school business may also find it useful to supplement the protection of general liability with some additional policies, such as:

  • Commercial auto insurance
  • Professional liability insurance
  • Commercial umbrella insurance
  • Workers’ compensation insurance

Vendors that can sell coverage to your driving school business typically fall into two general categories:

  • Traditional brick-and-mortar insurers — These more conventional choices, which include the likes of The Hartford and Nationwide, are renowned for their experience in the industry and the quality of their policies. They are identified as having physical locations and utilizing insurance agents.
  • Online insurers — These more modern choices, which include the likes of Tivly and Next, are recognized for their cutting-edge technologies like AI to provide personalized and high-quality insurance at low prices.

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Cost of General Liability Insurance

The average driving school 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 driving school 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 Driving School Business

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Example 1: A student trips on an extension cord while walking to your restroom and breaks an arm. His parents demand repayment for his medical treatment. General liability insurance would cover the student’s medical bills.

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Example 2: If a competitor sues your school for libel, general liability insurance will cover your legal fees and any awarded damages in a settlement.

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Example 3: During a tour of your school, a parent slips, falls and breaks a wrist. She claims her injury is the result of your negligence and files a lawsuit. General liability insurance would cover your legal fees and any awarded damages in a settlement.

Other Types of Coverage Driving School 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 other types of insurance all driving schools should obtain:

Commercial Auto Insurance

Every vehicle you drive for business purposes requires commercial auto coverage. If you use personal vehicles for work duties, your personal car insurance won’t pay for damages to your car or medical treatment for anyone injured in a work-related accident. Commercial auto insurance protects all vehicles you use on-the-job in the event of an accident.

Professional Liability Insurance

As a driving instructor, it’s possible that one of your students could be involved in an accident and try to hold you responsible. Professional liability insurance would protect you in this situation by covering your legal fees as well as any damages awarded in a settlement.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability benefits stemming from a work-related accident.

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 driving school 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.
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Driving School 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, to ensure your driving school gets off on the right foot, it is imperative that it possesses sufficient business insurance to protect it from the financial consequences of the risks it will face.

More than this, it is also highly likely that your school will also need certain insurance policies in particular (e.g., commercial auto insurance) if it wants to operate legally.

Not necessarily. Certain exceptions may be written directly into your driving school 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.