Tire shops are primarily engaged in retailing new or used tires, sometimes in combination with other automotive repair services.
All retail establishments must purchase business insurance in order to protect their assets, and tire shops are no different. Business insurance for all kinds of retail establishments will cover basic property and liability concerns, but owners of tire shops need to make sure that their insurance policies are customized to their specific needs. If you change or install new tires or offer additional auto repair services, you’ll need some additional coverage.
A local independent insurance agent can help you get the tire shop insurance you need to address all of your risks.
Why Do You Need Tire Shop Insurance?
Tire shops must invest in insurance policies to protect their business assets from the following potential risks:
- Accidents, such as trips and falls in the store or parking lot
- Shopping carts or store fixtures causing injury or property damage in the store or parking lot
- Damage to your inventory due to some catastrophic or unexpected event (fire, smoke, weather, vandalism, etc.)
- Loss of income due to a catastrophic or unexpected event
- Equipment damage
- Employee theft of cash or inventory
- Delivery drivers involved in automobile accidents
- Selling faulty products
- Employee lawsuits related to discrimination or other claims
- Cyber breaches
- Fire damage to landlord’s property
What Does Tire Shop Insurance Cover?
Tire shop insurance consists of several types of business insurance policies that are essential for any type of retail establishment. If you are a tire retailer, you’ll need to start your coverage with the following:
- Commercial general liability (CGL) insurance is critical for any tire shop. It protects you from costs related to bodily injury or property damage that you or your employees cause to third parties. CGL policies also cover your defense costs, court costs, and any court-ordered judgments that you must pay.
- Commercial property insurance is essential for proprietors who own their buildings or whose business handles a large volume of expensive inventory. Business property insurance protects you if a fire, vandalism, smoke, theft, or other type of event damages your property. It provides coverage for lost inventory, office equipment, computers, and more.
- Commercial property insurance policies usually include business interruption coverage, or business income coverage, which protects your earnings if your business is unable to operate because of damage caused by some type of disruption (fire, hail, wind, equipment breakdown). This coverage is usually quite affordable and will be invaluable if you are forced to close your doors for a some time in order to make repairs. It pays for rent, employee salaries, lost income, relocation fees, and more.
You can expand your business income policy to include coverage for breakdowns in utility services (water, electrical) that force you to temporarily close your doors.
Owners of tire shops may want to consider a business owners policy (BOP) if they qualify for one. BOPs are designed for small businesses and include liability, property, and business income insurance in one affordable package policy.
Do You Need Commercial Auto Insurance for Your Tire Shop?
Does your tire shop deliver?
If so, you need commercial auto insurance. Business auto insurance covers your company’s vehicles and drivers (cars, SUVs, vans and trucks) that are damaged or injured in a collision or some other type of event.
If you or your employees drive personal vehicles for business purposes, you must have non-owned or hired auto liability coverage to protect your company if an employee is an accident while out making deliveries.
The Importance of Product Liability Coverage for Tire Shops
Tire shops sell products to the general public. The products you sell are placed on vehicles that are driven on public roads, in the presence of other vehicles, pedestrians, and other types of property. If a tire is faulty and leads to injury or death of a driver, passenger, or bystander, your business could be held liable.
Product liability insurance covers a business’s financial responsibility 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 failing to warn a buyer of a particular danger.
Any company that participated in bringing a faulty product to market can be included in a lawsuit and held liable for damages to the user. The resulting payouts for medical costs, compensatory damages, economic damage, attorney fees, court costs, and even punitive damages can be insurmountable for a small business.
Your CGL policy or BOP might cover some product liability claims, but that coverage may be limited and insufficient for your needs. Talk to your independent insurance agent about your product liability coverage needs.
What Is Employee Theft and Crime Coverage?
Small businesses are particularly vulnerable to crimes such as employee fraud and embezzlement. Even a small cash theft can be difficult to overcome.
Employee theft and crime coverage can protect your business from the costs of theft, dishonesty, and fraudulent acts committed by an individual employee or a group of employees. While it may be difficult for you to imagine, employees all too often steal property, money, and securities owned by their employers.
Employee dishonesty coverage can be purchased as a stand-alone policy or as an endorsement on other business insurance policies. A basic stand-alone employee theft and crime policy provides coverage for forgery, alteration, theft, unauthorized electronic fund transfers, credit card fraud, computer fraud, money order fraud, and counterfeit fraud. You can also add endorsements for additional coverage.
Do You Need More Coverage If You Offer Auto Repairs?
If you also offer tire installation or certain types of auto repairs along with your retail business, you’ll need some additional liability protection for when customers’ vehicles are left in your care.
Garagekeepers liability insurance is specialty business insurance coverage designed for auto repair shops as well as service stations, auto body shops, detail shops, vehicle electrical and repair shops, auto glass installers, oil change and lube shops, emissions testing sites, and just about any other type of establishment that provides parts or service for vehicles and temporarily stores those vehicles onsite.
Garagekeepers liability insurance protects you if a customer’s vehicle is damaged due to your negligence while it is in your care, custody, or control. This protection is not included in the standard garage liability policy. There are a number of ways in which a customer’s vehicle can be damaged while in your possession, such as fire, theft, weather events, vandalism, employee test drives, and lift accidents—to name a few.
Garagekeepers liability insurance does not cover the contents of a customer’s vehicle, and also does not cover damage that occurs as a result of faulty workmanship, parts, or insufficient warranties.
What Other Tire Shop Insurance Policies Do You Need?
In addition to the coverage types described above, tire shops will want to consider some of the following types of business insurance. Whether you need them depends upon your specific business needs.
How Much Does Tire Shop Insurance Cost?
Insurance for a tire shop will cost from several hundred dollars a month to thousands. It depends on:
- The size of your business
- The location of your business
- The number of employees
- The value of the building (if you own it) and other property and physical assets you keep on your premises (inventory, machinery and equipment, etc.)
- The types of services you offer in addition to retailing tires
- The types and amounts of coverage you need
If you are a sole proprietor with just a few employees, you can expect to pay far less for your business insurance than a multi-location business with numerous employees.
Ultimately the types and amounts of coverage you need to adequately cover your risks will dictate the cost of your coverage.
Find and Compare Quotes
An independent insurance agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Insurance Agent
Independent insurance agents simplify the search process for finding the right tire shop insurance. They’ll walk you through some handpicked policy options and explain the details and options.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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