Last Updated: May 30, 2024, 1:30 pm by TRUiC Team

Oil Change Business Insurance

Getting insurance for your oil change business is essential.

Oil change businesses must be protected against things like claims of property damage, product liability, and negligence.

For example, one of your employees could damage someone’s vehicle while performing routine maintenance, or an employee could provide bad advice to a customer that causes their car to require further repairs.

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

Compass needle pointing towards blue insurance logo
How to Start an LLC Tip Icon

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

Best Insurance for an Oil Change Business

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

Some of the risks general liability insurance covers are:

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

There are many other types of insurance policies for your oil change business to consider in addition to general liability, such as:

  • Commercial auto insurance for any vehicles your oil change uses
  • Workers’ compensation insurance if you hire additional mechanics or other staff
  • Commercial umbrella insurance to extend your policy limits
  • Professional liability insurance if the event your advice or actions are found to be negligent

To decide the best type for your company, you need to consider the unique characteristics of each main type. These are:

  • Traditional brick-and-mortar insurers
  • Online insurers

While each of these has its own pros and cons, we generally recommend online insurers like Next and Tivly for small businesses as they offer high-quality, personalized insurance for a much more affordable price because they have lower overhead.

Let's Find the Coverage You Need

The best insurers design exactly the coverage you need at the most affordable price.

Cost of General Liability Insurance

The average oil change shop 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 an oil change 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

How to Start an LLC Tip Icon

Find the Best Rate

Discover the best coverage at the lowest rate in our affordable business insurance review.

Common Situations That General Liability Insurance May Cover for an Oil Change Business

How to Start an LLC Tip Icon

Example 1: While changing a customer’s oil, your employee fails to fully tighten the oil plug and it falls out after the customer drives away. The oil drains out, and the engine seizes, requiring a full replacement engine. Your general liability insurance policy would cover the repair costs for the customer’s property.

How to Start an LLC Tip Icon

Example 2: A customer is walking through the door of the garage to the visitor’s area when he slips on some lubricant and falls, sustaining injuries that require immediate medical care. With a general liability insurance policy, you have coverage that will pay for the costs of his medical care.

How to Start an LLC Tip Icon

Example 3: A competitor sues your company, claiming that you disparaged his business in your latest marketing campaign and damaged his reputation. Your general liability insurance will pay your legal defense when accused of libel as well as the cost of settling out of court if it is determined that doing so is the best course of action.

Other Types of Coverage Oil Change 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:

Commercial Property Insurance

Acquiring the lifts, hand tools, power tools, and other equipment you have in your shop took a considerable investment on your part. If a disaster were to strike, like a fire, and all your equipment was destroyed, it would likely be a struggle to replace everything. In addition to the damage to any owned real estate, a commercial property insurance policy will help you pay to replace your equipment, up to your policy limits, so you do not have to pay the cost out of pocket.

Workers’ Compensation Insurance

Although specific laws vary by state, most mandate that employers carry workers’ compensation insurance. By carrying coverage, you have the financial backing of your insurer should an employee sustain a work-related injury. Your policy will cover the costs of treating the injury, as well as the costs of paying income that would otherwise be lost while the employee is unable to work.

Commercial Umbrella Insurance

There are situations where the limits of your general liability insurance policy may be exceeded, such as losing a big lawsuit or replacing a one-of-a-kind automobile. When your policy limits are maxed out, you are required to pick up the extra costs—unless you have commercial umbrella insurance. An umbrella policy will take over when your general liability limits are reached.

Commercial Auto Insurance

If your oil change business has one or more vehicles that you use primarily for business purposes, you need to carry a commercial auto insurance policy. In the event of an accident with a company vehicle, the policy will pay for the costs of medical care for you and your employees as well as any damages that result from a business-related trip in the vehicle.

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 oil change 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.

Oil Change 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. Finding business insurance for your oil change business needs to be done before you take on any customers.

Moreover, it’s likely that your state requires you to purchase certain policies (e.g., workers’ compensation insurance). Even if it doesn’t, good business insurance protects your company’s financial security.

Not necessarily. Certain exceptions may be written directly into your oil change 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.