Company insurance is intended to safeguard the financial assets of a business owner and is a necessary investment for a custom vehicle shop.

Company insurance is intended to safeguard the financial assets of a business owner and is a necessary investment for a custom vehicle shop.

This article will discuss the primary insurance coverage for custom vehicle businesses, general liability insurance, as well as additional products that are appropriate for this industry.

Custom Car Shops Need General Liability Insurance

Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.

General liability insurance covers the following risks:

Physical harm

Damage to property

Medical expenses

Legal defence and decision

Personal and commercial harm

While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.

Situations That A Custom Car Shop’s General Liability Insurance May Cover

Example 1: After completing a custom automobile restoration and lowering it off the hydraulic lift, you notice it wasn’t securely secured and end up destroying the rear end. General liability insurance will most likely cover any vehicle damage as well as any required lift repairs.

Example 2: A client enters the service bay to inquire about the progress of their vehicle’s restoration. They fall over a cable while touring the store and break their wrist. With general liability insurance, you may be certain that the costs of a lawsuit will most likely be covered by your policy.

Example 3: You accidently crash through a side door while moving a completely restored custom automobile from the service bay out into the parking lot for pick-up. The damages to the car and the door will most likely be covered by general liability insurance.

Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.

General Liability Insurance Cost

For $1 million in general liability coverage, the typical custom vehicle business in America costs between $500 and $1,500 each year.

The cost of your coverage will be determined by a number of variables. Among them are your:



Employees’ number

Per-occurrence restriction

The overall aggregate limit

You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.

Other Types of Coverage Required by Custom Car Shops

While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all custom automobile businesses should have include:

Insurance for Workers’ Compensation

State law requires most firms to have workers’ compensation insurance. If one of your workers gets hurt on the job, this sort of insurance can assist pay for their medical bills and missed earnings.

Insurance for Commercial Property

If you own the building where your custom vehicle shop is located, you need get commercial property insurance to safeguard the structure and any business-related things held inside. This coverage may assist in covering the costs of damage caused by a fire, harsh weather, theft, or vandalism.

Coverage Options for Some Custom Car Shops

In addition to the insurance listed above, your custom vehicle business may need other forms of coverage based on particular elements of your operations. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.

Liability Insurance for Garage Keepers

If you leave bespoke automobiles on your lot for a lengthy period of time, they are vulnerable to theft or vandalism by robbers. This specialist insurance coverage is intended to assist with the expense of repairing or replacing stolen automobiles.

Insurance for Commercial Vehicles

Personal car insurance does not cover commercial vehicles. Commercial property insurance helps to pay related damages if you are involved in an accident or cause damage to another person’s property while using a business vehicle.

Additional Security Measures for Your Company

Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.

With this in mind, here are a few steps you can take to better secure your company:

Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)

To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)

Keep your company licences up to date.

Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.

If your company is an LLC, you should check into LLC insurance.