Car washes are very unique businesses with varying business insurance needs. No matter what type of car wash you operate, you face risks such as fire, vandalism, slips and falls and damage to customer vehicles. You need to find a comprehensive car wash insurance program to make sure that your assets are protected.
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Car Washes Can Be Dangerous Places
Regardless of the type of car wash you operate, accidents and errors that can lead to financial loss are everywhere. Customer slips and falls in the wet, soapy environment should be high on your list of concerns. In addition, your business insurance should at least address the following:
- Fire, theft or vandalism
- Employee injuries
- Weather events and business disruption
- Employee theft and crime
- Employee lawsuits for wrongful termination or harassment
- Customer vehicle damage
- Equipment and machinery breakdown
What Type of Car Wash Do You Operate?
Most car washes are either self-service or full-service. Self-service car washes are performed entirely by machines, with no interaction between customer vehicles and employees (e.g., the car wash at your local gas station).
A self-service car wash cannot operate without fully functional machinery and equipment. And that equipment can cause damage to customer vehicles, no matter how many precautions you take.
If you operate a full-service car wash or perform some services by hand, your employees likely operate customer vehicles. Many full-service car washes offer additional services, such as oil changes, brake repairs or vehicle inspections, leaving you exposed to a variety of additional property or liability claims.
Car wash insurance needs vary depending on the type of car wash you operate and the services you provide. Self-service car wash insurance begins with fairly standard coverage.
- Commercial property coverage, which protects your building(s) and business personal property
- Commercial general liability (CGL) coverage, which provides protection for claims or lawsuits related to bodily injury or property damage caused by you or your employees
- Business interruption coverage, or business income coverage, which provides coverage for lost income and pays for continued expenses if you experience a weather-related or some other type of business interruption. Depending on where you are located, your revenue may fluctuate seasonally; losing business during your peak season due to a weather-related disruption can be devastating.
Self-service car washes must also consider boiler and machinery, or equipment breakdown coverage, which we highlight in greater detail below.
If you own a full-service car wash where employees actually get behind the wheel of your customers’ vehicles, you need additional protection.
In addition to the property, liability and business income protection described above, you also need garagekeepers liability insurance for when you take customers’ vehicles into your possession.
What Is Garagekeepers Liability Insurance?
Garagekeepers liability insurance is a specialty business insurance policy designed for garages that take possession of customer vehicles in order to perform some kind of service: car washes; service stations; auto body shops; detail shops; oil change and lube shops; vehicle inspection sites; and just about any other type of establishment that provides parts or service for vehicles and takes temporary possession of those vehicles.
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 a standard commercial liability policy.
Garagekeepers liability insurance does not cover the contents of a customer’s vehicle. Nor does it cover damage that occurs as a result of faulty workmanship, parts or insufficient warrantees.
What Is Equipment Breakdown Coverage?
Equipment breakdown insurance, often referred to as boiler and machinery coverage, supplements your business property insurance. It covers certain costs associated with accidental breakdown of machinery or equipment and the resulting property damage or loss.
Self-service car washes are 100 percent reliant on equipment and machinery to provide service to their customers. If your car wash machinery breaks down or sustains damage and you cannot operate, you will face a devastating loss of revenue.
Equipment breakdown coverage typically covers breakdowns due to power surges, motor burnout, boiler malfunction and even operator error. While the name evokes images of old, outdated machines, equipment breakdown insurance includes coverage for the latest technologies.
You can obtain coverage for mechanical and electrical equipment, computers and computer systems, boilers, and other types of pressure equipment.
Boiler and machinery insurance is important for car washes because it covers repair and replacement costs as well as business interruption costs. Even if you lease your building and equipment, this policy provides coverage for business interruption.
Other Car Wash Insurance Programs
If you own a car wash or similar operation, you need to consider the following types of car wash insurance in addition to those discussed above.
- Employee theft and crime insurance covers costs associated with employee theft and crime.
- Workers’ compensation protects employees who are injured on the job.
- Employment practices liability coverage provides coverage if an employee sues you for discrimination or some other type of unlawful or damaging employment practice.
Car Wash Insurance Cost
Car wash insurance is a necessary investment in protecting your business and your livelihood. Purchasing insufficient or minimal coverage may seem like it will save you money, but if you have a claim that exceeds your coverage, the devastating costs could force you to close your doors.
When shopping for car wash insurance, make sure that you are choosing proper coverage limits, and most importantly, take the time to determine the true value of your buildings and property.
It is equally important to work with an independent insurance agent who has experience working with car washes. You want coverage that is tailored to the specific risks you face, not cookie-cutter coverage that could leave you with significant gaps.
You have to work hard as a business owner to keep your insurance costs low. If you have a lot of claims, your insurance costs will go up and could even become unaffordable.
The safety of your customers and employees should be your number one priority. Keep your machinery in good working condition, and hire employees who will treat your customers’ property with care.
Ask an Independent Insurance Agent About Car Wash Insurance Companies
Car wash insurance is complicated. You want policies and programs that are tailored to the specific type of business you run and the services that you offer. Only an independent insurance agent can find proposals from multiple reputable insurance companies who specialize in car washes and related businesses.
Your independent agent will act as your trusted adviser who will have your long-term best interests in mind. Contact an Independent Insurance Agent today.