Car detailing, as the word suggests, involves the cleaning of a car to the tiniest detail. It’s one of the most profitable businesses for car enthusiasts, but things can get tricky when it comes to choosing the right types of insurance.
Here are all the insurances you may need as a car detailer:
This piece will cover everything you need to know about insuring your car detailing business, from why you need insurance to the types to choose. Let’s get started.
Do You Need Insurance To Detail Cars?
You need insurance to detail cars. Having insurance as a car detailer cushions you against business risks such as the following:
Let’s talk a bit more about these business risks and how insurance helps.
How Insurance Helps With Car Damage
When a car owner drives into your workshop and requests for car detailing services, they expect you to take care of their prized asset.
That duty to care opens up an avenue for liability, especially since it’s near impossible to avoid car damage when you run a car detailing business.
You might have the skill and level-headedness to use the proper techniques, but some of your employees might not. For instance, an employee can use the wrong detailing chemical, causing significant car damage.
It’s not just your employees who can damage cars. A worn-out machine in your workshop can, too, and the same goes for weather disasters outside your control.
Regardless of the cause, the expense of any car damage sustained during detailing falls on. Depending on the type of car, these costs can be pretty significant.
That’s why your safest bet is to get insurance cover for client car damage.
Doing that doesn’t just protect your business; it’s also great for client acquisition. Some clients won’t work with you if you don’t have car damage insurance.
Acquiring car damage insurance isn’t enough as far as risk reduction goes. You also need to train your employees to ensure that they’re using proper techniques.
Encourage patience and adopt a step-by-step system that each employee must adhere to when detailing a car.
Better yet, you can adopt a division of labor system that allows for each employee to specialize in one aspect of the detailing process.
It’ll reduce the chances of a mishap from an employee.
Finally, ensure that you build your property according to local government standards to reduce the risk of weather damage.
How Insurance Helps With Employee or Client Injuries
There’s always a risk that an employee or client will injure themselves on your business premises, potentially leading to a lawsuit.
A lot can go wrong on a typical day of work, and you’ll want to have coverage when accidents happen.
Employees at your car detailing garage operate machinery, and mistakes or malfunctions can result in injuries.
When they’re not operating machines, they’re likely walking around or standing. If the floor is slippery (quite common during winter months), a slip or fall may happen, injuring either an employee or a client.
More often than not, employees and clients will look to you for compensation if they sustain injuries at your shop.
This is where insurance comes in. If an employee or client gets injured on your business premises, insurance covers your liability.
In addition to insurance, you can minimize injury-related liabilities by ensuring that your premises meet safety standards. It’s the small things that matter.
Clear spilled water, detergent, or waxes as soon as possible, and keep client waiting areas in exceptional condition, with uneven or slippery surfaces marked.
Also, ensure that your employees have all the necessary safety equipment and train them on safe work practices.
Basically, do what you must to make sure that your premises meet the set occupational health and safety standards.
How Insurance Helps With Property Damage or Theft
The equipment in your shop can get damaged due to wear and tear or employee error.
Third parties, like clients, can also inadvertently damage property.
Worse still, expensive car detailing machines can attract thieves looking to make a dishonest buck by stealing your property.
Replacing stolen or repairing damaged car detailing equipment is expensive, more so if you don’t have damage insurance.
Insurance helps safeguard against significant expenses caused by theft or damage by covering all or part of the repair/replacement cost, depending on your plan.
While having an insurance plan is a great start, there’s still more you can do to reduce the risk of damage and theft:
What Insurances Do You Need as a Car Detailer?
Evidently, there are multiple ways you can incur liability as a car detailer.
That’s why you need several types of insurance to cover as many potential liabilities as possible.
You need the following insurances as a car detailer:
Here’s an in-depth review of each type of insurance.
General Liability Insurance
General liability insurance is a sort of blanket insurance for your shop. It protects businesses from several third-party claims, including property damage and injury.
The key word here is ‘third-party.” It means that this type of insurance won’t cover things like theft/damage of your equipment and property and professional mistakes.
Instead, it’ll cover damage/injury dealt to third-parties like customers and other businesses.
So if a customer injures themselves or has their car damaged in your shop and sues for compensation, general liability will help with that.
But if your employee damages your equipment, the resulting expense won’t be covered.
The specifics of what’s covered may vary from one plan/insurance provider to another.
That’s why it’s crucial that you read and understand the insurance agreement thoroughly.
If there are items or terms you can’t figure out, enlist the help of an attorney.
The cost of general liability insurance varies with the size of your business. However, you can expect to pay around $50 monthly.
Garage Keeper Insurance
Detailing can be a long and painstaking process.
Therefore, you can expect car owners to leave their cars under your care throughout the detailing process.
That’s why you need Garage Keeper Insurance. This type of insurance covers liabilities that may arise in the period that the client hands over their car to you.
Put otherwise, it covers any damage dealt to the vehicle when it’s in your business’s care.
The average cost of garage keeper insurance ranges from $1000 to $1,300 per year.
I’d highly recommend purchasing it even if you operate a mobile car detailing service. Anything can happen when the vehicle is in your care, and the last thing you want is to shoulder unnecessary and avoidable expenses.
Commercial Property Insurance
The machines and tools in your workshop are expensive, and their value will only increase as you diversify your business to offer different services.
To protect your investment, you need commercial property insurance.
The average cost of commercial property insurance ranges from $1,000 to $3,000 per year.
It covers most forms of loss and damage to your property, including those caused by bad weather, fire, vandalism, or theft.
Don’t get sucked into the idea that you’ve set up your business in a safe neighborhood. Your expensive machinery will attract thieves, and some of them might even be your employees.
To be on the safe side, install and hire top-of-the-range security and couple it with insurance.
Worker’s Compensation Insurance
According to this study from Jonathan Gruber and Alan B. Krueger, worker’s compensation insurance provides a minimum amount of cash or benefits to any employee suffering from a work-related illness or injury.
Interestingly, most of the employer’s cost for this insurance is usually handed to the employee in the form of lower wages.
Most US states require that you get worker’s compensation insurance for your employees.
If you’ve set up in such a state, there’s no way to avoid this type of insurance without breaking the law.
You won’t be penalized for failing to provide workers’ compensation insurance if state law doesn’t provide for it.
However, it would be prudent to secure such insurance to increase motivation in your work base.
Wondering how much it’ll cost? The cost of worker’s compensation insurance varies depending on the business.
However, you can expect to pay an average of $40 per month.
Commercial Crime Insurance
Commercial crime insurance compensates you for the loss of property through crime.
Unlike commercial property insurance, this type of coverage focuses solely on loss or damage sustained through crime.
This type of insurance will cost you around $650 annually.
While it might be unnecessary if you have extensive commercial property insurance, it might be worthwhile if you’ve set up shop in a high-crime rate area.
Key Takeaways
The following are the key takeaways from the above article:
Sources
Go Auto Blog: Car Detailing – What It is and Why You Shouldn’t Ignore It
General Liability: Auto Detailing and Mobile Car Wash Insurance
AdvisorSmith: Auto Detailing and Car Wash Insurance
Types of Insurance for Car Detailing
Insureon: Auto Detailing and Car Wash Business Insurance
Nerdwallet: How Much Does General Liability Insurance Cost
ProInsurance Group: How Much Does Garage Keepers Insurance Cost
Embroker: How Much Does Commercial Property Insurance Cost?
