For car dealers and auto shops, managing garage risks is an essential part of good business. If a shop doesn’t proactively manage its operations to reduce risk to people and equipment, it could harm its reputation and lead to inventory loss or accidents. Without the right garage liability insurance, a single accident could harm a business beyond repair.
Establishing Effective Safety Policies
Auto dealers and shops must take steps to decrease their liability risks and reduce the likelihood of property damage or accidents. The right garage risk management starts with establishing safety protocols, which apply to the employees and customers of an auto shop or car dealer. These protocols could include proper vehicle handling, use of safety equipment, emergency response procedures, and cybersecurity best practices.
It’s a good idea to have regular employee training sessions so that your teams communicate with each other to address problems. This way, each employee stays updated on safety training, potential risks in the workplace, and how to minimize them.
Safety Measures for Vehicle Test Drives
Car dealers face specific safety risks when potential customers request a test drive for a vehicle they wish to buy. A test drive puts the customer in charge of the car, sometimes on busy roads.
Without liability insurance, a careless or uninsured driver may damage the inventory, which the business may be unable to recoup.
To minimize these risks, implement requirements such as identification and proof of insurance before a customer gets behind the wheel. Establishing predetermined routes and time limits can also ensure that both driver and car remain safe on the drive.
Proactive Maintenance and Inspections
One simple way to improve risk management is to maintain an accurate view of your business’s inventory. Car dealers should have regular vehicle maintenance and inspections, and auto shops should have a standard way of performing routine tasks.
Other helpful procedures include conducting thorough inventory inspections by qualified mechanics before a sale. Consistent inspections and policies make it easier to identify and address potential problems before issues occur.
Securing Lot and Inventory
Due to the valuable inventory they handle, auto shops and dealerships are often the targets of thieves. To reduce the risk of theft, it’s important to keep all vehicles secure and protected. Automotive businesses can install surveillance cameras, hire security personnel, and erect secure fencing around the premises.
An alarm system is another essential tool in preventing theft and vandalism. It can be a significant deterrent and alert the authorities in case of a break-in. Having an alarm system can help ensure the safety and security of the store’s vehicles, protecting them from any potential loss or damage.
Cybersecurity Measures
Auto shops and car dealers often handle sensitive data like payment details, contact information, and vehicle histories. Most automotive shops store this data digitally, which is why such businesses need to take cybersecurity measures.
Cybersecurity measures protect customer data, financial records, and dealership information. They should install firewalls and encryption protocols and conduct regular backups to prevent data loss.
Employee Training and Background Checks
While monitoring customers is an integral part of risk management, it’s also important to establish consistent protocols for employees. Measures like background checks for every employee and regular training sessions on ethics can help.
Remember, no single security guard or manager can watch every room or aspect of a location. That’s why it’s also important to encourage open communication between employees in different departments. That way, if one employee notices anything concerning, they can quickly communicate it across the store.
Liability Insurance for Comprehensive Coverage
No one can achieve 100% risk avoidance, and that is where liability insurance is critical. When accidents occur, liability insurance helps cover the costs of damages, legal fees, and more. There are a few different liability insurance options to choose from, including:
- General liability insurance: Covers claims of bodily injury or property damage that may impact a business operations
- Premises liability insurance: Covers injury or property damage occurring on the business premises.
- Auto liability insurance: Protects against claims of bodily injury or property damage caused by the business’s owned or non-owned vehicles
- Owned vehicles: Covers accidents involving vehicles owned by the business, such as service vans or tow trucks
- Physical damage insurance for owned vehicles: Covers damage to the business’s owned vehicles resulting from collisions, theft, vandalism, or other perils.
- Non-Owned Vehicles: Extends coverage to vehicles not owned by the business but used for business purposes, such as employee vehicles used for deliveries or running errands
- Comprehensive coverage: Covers damage to the business’s vehicles from non-collision incidents, such as theft, vandalism, fire, or natural disasters
A comprehensive approach to liability insurance is one of the best ways to protect a business from the ever-present risks of business ownership. The right liability insurance safeguards businesses from personal injury, property damage, and other claims.
Brokers should seek to understand client needs and ensure they have adequate liability coverage. By discussing relevant risk management strategies, brokers can build trust while offering the highest-quality insurance packages available.
To learn how Cochrane & Company can help you offer the best liability insurance to your clients, contact us today!
About Cochrane & Company
For over six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients nationwide, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.
