Used auto parts stores are primarily engaged in retailing used or rebuilt automotive parts and accessories.
Any kind of shop or retail store should purchase business insurance in order to protect their assets, and used auto parts stores are no different. Business insurance typically covers basic property and liability risks, but owners of used auto parts stores need to make sure that their insurance policies are customized to their specific needs.
A local independent insurance agent can help you find insurance that covers the risks of your used auto parts store.
Why Do You Need Used Auto Parts Store Insurance?
Used auto parts stores should invest in insurance policies that 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
- Selling faulty products
- Employee lawsuits related to discrimination or other claims
- Cyber breaches
- Fire damage to landlord’s property
What Insurance Policies Do Used Auto Parts Stores Need?
In order to protect your used auto parts store from all of the risks you face, you need a variety of insurance policies that protect your property and can help you pay for your legal fees if you’re sued for some kind of negligence.
- Commercial general liability (CGL) insurance: This is critical for any used auto parts store. 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 court-ordered judgments that you must pay.
- Commercial property insurance: This is essential for proprietors who own their buildings or whose business handles a large volume of inventory. Business property insurance protects you if 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 period of 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 used auto parts stores 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 own any business autos, trucks, or vans? 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.
The Importance of Product Liability for Used Auto Parts Stores
Used auto parts stores sell products to the general public. The products you sell are placed in vehicles that are driven on public roads, in the presence of other vehicles, pedestrians, and other types of property. If an auto part or tire is faulty and leads to injury or death of a driver, passenger, or bystander, your business could be held liable.
Product liability insurance: This 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.
While manufacturers often bear the brunt of the blame when a product causes harm, any company that participates 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.
Product liability claims are generally covered under a CGL policy or a BOP. Your insurance agent may recommend that you increase your product liability coverage to reflect any increased risk related to the auto parts that you sell.
What Is Employee Theft and Crime Coverage?
Small businesses are particularly vulnerable to crimes such as employee fraud or embezzlement. Even a small cash theft can be difficult to overcome.
Employee theft and crime coverage can protect your businesses 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 standalone 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 funds transfers, credit card fraud, computer fraud, money order fraud, and counterfeit fraud. You can also add endorsements for additional coverage.
Other Coverage to Consider for Your Used Auto Parts Store
In addition to the insurance policies described above, used auto parts stores will want to consider some of the following types of business insurance. Whether or not you need them depends upon your specific business needs.
- Workers’ compensation insurance
- Equipment breakdown/boiler and machinery coverage
- Fire legal liability coverage
- Employment practices liability coverage
- Cyber liability coverage
How Much Does Used Auto Parts Store Insurance Cost?
The cost of used auto parts store insurance varies depending on the size of your business, the number of employees you have, and how much business property (buildings, inventory, and equipment) you have.
Business insurance costs are also higher or lower depending on the location of your business, whether or not you own any commercial vehicles, and how risky your physical space and line of work is to customers and employees.
An independent agent who has experience working with businesses like yours can help you decide the types and amounts of coverage you need for your used auto parts store. The choices you make will determine your cost of coverage.
Find and Compare Quotes
An independent 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 Agent
Our agents simplify the search process for finding the right used auto parts store insurance. They’ll walk you through the handpicked policy options and explain the details.
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 omit 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 a TrustedChoice.com 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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