RV dealerships face tough competition and a variety of exposures that can make staying in business a challenge. An adverse event can occur at any time, and RV dealers must invest in business insurance in order to protect their assets and keep the doors open for the long term.
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RV Dealers Have Special Concerns
RV dealerships are unique businesses for a variety of reasons. RV dealers – like all motor vehicle dealers – must insure their businesses to address typical business risks (fire, weather, slips and falls, etc.) as well as all of the risks associated with their product – recreational vehicles.
The inventory on an RV lot is highly valuable and vulnerable to the elements. In addition, your product will be frequently driven on public roads by your customers as well as tested, touched and manipulated in any number of ways.
What’s more, you probably have vehicles that belong to others on your business property for purposes of repair or storage. All of these concerns must be addressed with RV business insurance.
Property Risks for RV Dealers
Like most businesses, RV dealers likely have a building and contents that need to be protected with insurance. In addition, you face property risks associated with your inventory and your interaction with the general public.
Property damage to your inventory can occur in any number of ways, from windstorms and hail to vandalism and customers simply touching and testing the vehicles on your lot.
Weather is one of the more serious concerns for your inventory. If one vehicle is damaged in a hailstorm, chances are every vehicle on your lot has sustained damage.
Consider the costs of weather events in terms of property damage:
- According to the National Oceanic Atmospheric Administration (NOAA), hail causes about $1 billion in damage to crops and property each year.
- A report cited by the Insurance Information Institute states that over the 14 years from 2000 to 2013, U.S. insurers paid almost 9 million claims for hail losses, totaling more than $54 billion.
Having the general public on your lot is how you sell your product, and unfortunately a great deal of risk comes with the territory. Customers want to look at the RVs, touch and test the equipment, and go for test drives. There is an endless number of ways in which the RVs on your lot can be damaged by your customers or others.
Liability Risks for RV Dealers
RV dealers also face a variety of unique liability risks associated with the following activities that take place at your business and with your product:
- Test drives: Customers who test drive your RVs out on public roads pose a great threat to other drivers and their vehicles. People driving large, unfamiliar vehicles can be involved in an accident that results in property damage, injury or death, and you can be held responsible.
- Faulty repairs: If you or your employees cause damage to someone else’s vehicle that is in your possession or perform a faulty repair that leads to injury or death, you can be held liable.
- Catastrophic events: Fire, smoke or other catastrophic events can damage customer RVs in your possession. You could be held liable for property damage to other people’s property that is in your care.
- Product liability: A faulty part in an RV that you sell can cause property damage or injury to someone. You can be held liable in these cases.
RV Dealer Insurance Coverage Overview
The insurance industry has developed a special set of policies, or packaged policies, that are designed for RV dealers. These policies cover your inventory, work on RVs in your possession, negligent or faulty work on vehicles, liability for vehicles out on the road and much more.
RV dealers looking to find appropriate business insurance coverage must work with a knowledgeable agent who specializes in their line of work. The right agent can find individual and packaged RV dealer insurance policies that will address the various forms of property and liability risk inherent in your business.
The following are some basic business insurance policies that you will likely need in addition to specialty policies and endorsements tailored to RV dealers.
- Commercial general liability (CGL) insurance provides broad coverage for bodily injury and property damage caused by you or your employees. CGL insurance also covers claims related to slander, libel and advertising liability.
- Commercial property insurance provides protection for your business property, including building(s) and contents.
- Business income coverage provides coverage for lost income and expenses if you must temporarily cease operations after a catastrophic event. It pays employee salaries, rent and other expenses while you are closed to make repairs.
You will also likely need the following types of coverage and others depending on your needs and the specifics of your business:
- Employee dishonesty coverage: covers employee theft and crime
- Auto dealer physical damage coverage/dealer’s open lot coverage: covers your inventory, or vehicles held for sale
- False pretenses coverage: protects your business if you are tricked into releasing a vehicle to someone under false pretenses
- Professional liability/errors and omissions insurance: for odometer, truth in lending and title-related claims
- Garagekeepers liability coverage: covers customers’ vehicles in your care, custody and control (e.g., for repairs)
- Inland marine coverage: for vehicles in transit
- Workers’ compensation: to protect employees who are injured on the job
- Product liability coverage: for losses or injuries to a user, buyer or bystander caused by a defect or malfunction of the product. In some instances, product liability insurance may also cover the manufacturer or seller of the product for defective design and “failure to warn.”
RV Dealers Need an Experienced Agent
No two RV dealers are alike, and your insurance needs are not alike, either. RV dealers need a customized mix of auto, property and liability protection to ensure that there are no gaps in coverage.
With the help of an experienced independent agent who specializes in RV dealerships, you can find a comprehensive RV dealer business insurance plan that is tailored to:
- the size of your business.
- the type of business you have.
- the number of employees you have.
- the products you sell.
- the services you provide.
Your agent should provide you with multiple proposals from reputable insurance companies who specialize in RV business insurance. Contact a local Independent Insurance Agent today.