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Lots Need A Lot of Coverage

Car Dealer Insurance

Car dealerships face a unique set of challenges and risks when it comes to protecting inventory and ensuring smooth operations. Car dealer insurance is essential to running a successful dealership, as it safeguards the business from a myriad of potential threats. In this comprehensive guide, we’ll delve into the various types of car dealer insurance policies, their benefits, costs, and tips for finding the right coverage for your dealership.

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  • General liability
  • Garage liability
  • Garage keepers
  • Dealer plate
  • Dealers open lot
  • Commercial property
  • Business interruption
  • Workers compensation
  • Product liability
  • Surety bonds

What is car dealer insurance?

Car dealer insurance is a specialized form of business insurance designed to cater to the specific needs of car dealerships. It encompasses various policies that cover the risks associated with owning and operating a dealership, such as theft, vandalism, vehicle damage, and liability issues. Comprehensive car dealer insurance is vital for dealerships to protect their investments and ensure business continuity in the face of unexpected incidents.

Why Car Dealerships Need Insurance

Car dealerships face numerous risks as they deal with high-value assets like vehicles, parts, and accessories. They also have to contend with potential liabilities from customer interactions, such as test drives, vehicle sales, and servicing. Some common risks that car dealerships need insurance for include:

  • Theft of vehicles or parts
  • Vandalism or damage to vehicles
  • Accidents during test drives or employee usage of cars
  • Customer claims due to faulty vehicles
  • Employee injuries on the job
  • Property damage to the dealership’s premises

Without adequate insurance coverage, these risks could lead to significant financial losses or legal issues.

Types of Car Dealer Insurance Policies

There are several types of insurance policies that car dealerships should consider to ensure comprehensive coverage. Each policy addresses different risks and is tailored to the specific needs of the dealership. Some of the most common types of car dealer insurance policies are:

Garage Liability Insurance

Garage liability insurance provides coverage for bodily injury and property damage that occurs on the dealership’s premises or as a result of the dealership’s operations. This includes accidents involving vehicles owned by the dealership, as well as incidents that occur during regular business activities.

Garage Keepers Insurance

Garage keepers insurance protects dealerships from liability when a customer’s vehicle is damaged while in the dealership’s care, custody, or control. This could include fire, theft, vandalism, or collision damage while the vehicle is on the dealership’s premises for repairs or servicing.

Dealer Plate Insurance

Dealer plate insurance protects vehicles being test-driven by customers or used by employees. This policy covers the dealership’s liability for accidents during on-the-road test drives, ensuring that both the vehicle and the driver are protected.

False Pretense Insurance

False pretense insurance is an endorsement that can be added to a garage insurance policy to protect dealerships from losses resulting from the fraudulent acts of others. This coverage is particularly useful in cases of criminal or intentional misrepresentation, such as when a customer provides false information to obtain a vehicle.

Dealers Open Lot Insurance

Dealers open lot insurance offers coverage for vehicles stored in an open lot and vulnerable to damage from collisions, inclement weather, vandalism, and other unexpected events. This policy ensures that the dealership’s inventory is protected from financial loss in such scenarios.

Commercial Property Insurance

Commercial property insurance covers damage to the dealership’s physical assets, such as buildings, equipment, and inventory. This policy provides protection against a range of risks, including fire, theft, vandalism, flood, hail, and other disasters.

Business Interruption Insurance

Business interruption insurance covers the loss of revenue and payroll expenses that a dealership may incur if it is forced to close temporarily due to an unexpected event, such as vandalism or a natural disaster. This policy helps businesses stay afloat during challenging times by covering the financial gap created by the temporary closure.

Workers Compensation Insurance

Workers’ compensation insurance is crucial for dealerships, as it covers medical costs, rehabilitation expenses, and missed wages for employees who become ill or injured while on the job. Depending on the state laws, workers’ compensation insurance may be mandatory for businesses.

Product Liability Insurance

Product liability insurance protects dealerships from lawsuits filed by customers who experience damages or injuries caused by a product sold by the dealership. This policy covers the dealership’s legal expenses, such as attorney fees and settlements, in such cases.

Surety Bonds

Although not a traditional form of insurance, surety bonds are often required for obtaining a used car dealership license in many states. These bonds ensure that the dealership operates ethically and in compliance with state regulations, protecting both customers and the state from potential losses.

Costs of Car Dealer Insurance

The cost of car dealer insurance varies depending on several factors, such as claim history, business size, coverage level, location, and more. Here are some factors that can influence the cost of car dealer insurance:

  • Amount of coverage needed
  • Dealership’s location
  • Square footage of the dealership
  • Total business value
  • Number of vehicles for sale
  • Number of employees
  • Security systems in place

What risks do car dealers face?

Car dealers face a variety of unique risks, including stolen or vandalized vehicles, customer lawsuits due to faulty vehicles, and employee injuries. Adequate insurance coverage is crucial to mitigate these risks and protect the dealership financially.

Car dealer insurance is a crucial aspect of running a successful dealership, as it provides comprehensive protection against the unique risks and challenges these businesses face. Understanding the various types of car dealer insurance policies, their benefits, and costs will help you find the right coverage for your dealership.

Remember: The key to securing the best car dealer insurance coverage is thorough research, comparison of quotes, and evaluation of your dealership’s unique needs. Don’t hesitate to consult with us to ensure you have the right policies in place to protect your investment.

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General Liability Insurance

Commercial general liability insurance protects businesses from financial loss. General liability insurance provides coverage for you, your employees, and your business for common liability claims.

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Workers Compensation Insurance

Workers compensation insurance provides coverage for medical expenses, rehabilitation costs, and lost wages for employees who are injured or become ill at work. This coverage is required by most states and can be the most expensive line of insurance for most employers.

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Commercial Umbrella Insurance

Worry less about an unexpected event by supplementing your existing coverage with commercial umbrella insurance also known as an excess liability policy. 

Our Insurance Specialists

We've been protecting Mississippi businesses for decades. Our agent specialists have tons of experience across all industries, and our agency is backed by Leavitt Group's national family of agencies and experts.

Whether you're considering starting a new business or an established company, we can help answer your questions and provide insurance quotes from multiple companies.

Our job is to make sure all of our business partners are properly protected with insurance coverages that fit their individual business needs. We're all about properly protecting businesses, not just providing the cheapest coverage and moving on. For us, it's about partnerships, not just selling policies.

Ashton Serpas

Insurance Agent
Ocean Springs, MS

Joe Joe Tharp

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Jackson, MS

David Pyron

Insurance Agent
Jackson, MS

Ian Cross

Insurance Agent
Pascagoula, MS

Spencer Mitchener

Insurance Agent
Gulfport, MS

Cameron Farmer

Insurance Agent
Jackson, MS

Zac Little

Insurance Agent
Jackson, MS

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