It goes without saying that if you’re planning to open an auto detailing business with a stationary location or start up your own mobile auto detailing business, you’re going to need insurance to protect your business and your personal assets. The good news is, this type of insurance isn’t really all that expensive. Especially when you consider the alternative if you’re not properly insured. If an unforeseen event occurs, it could put you out of business and you could very quickly lose your personal assets.
The most popular insurance for these types of businesses is called Garage Keeper’s Liability. Even if you own a mobile detailing business, this is the type of policy you want to have. You want to be covered while you are working on a vehicle and while the vehicle is in your possession. When getting a quote for a policy premium you also want to be sure you’re getting coverage for moving, picking up and delivering the vehicles you will be working on. Even if you’re opening a mobile detailing business, you still need coverage for moving the vehicle — even if it’s from the garage to the driveway. You never know what could happen!
You also want to have your equipment insured against theft. Pressure washers, carpet extractors, vapor steamers, buffers, polishers, compressors and generators don’t come cheap, so it’s absolutely imperative to insure them too. Again, the insurance coverage for this type of equipment isn’t expensive, so have it included with your policy premium. Usually you’ll get a quote for a minimum of $100,000 of liability coverage, but you might consider a quote on $300,000, $500,000 and even a million dollar umbrella policy. Believe it or not, the premium cost doesn’t vary that much. Most garage keeper’s liability packages cover the vehicle you are working on against damage and theft, as well as coverage for your equipment and coverage for pick-up and delivery of any vehicle.
If you are operating a mobile detailing business, your premium costs will be lower than operating out of a shop. A typical premium for $500,000 worth of coverage for a mobile detailing operator is about $1,800 per year — or about $150 per month. Most agencies require a 20 percent down payment to start the policy. If you plan to operate your business at a stationary location your premium costs will probably be up to 25 percent higher.
If you plan on having employees, you’ll most likely have to pay workers compensation insurance. This will protect you and your employee in the unlikely event that an injury occurs while working on the job. Your insurance agent can give you a quote for this, too. In many cases for small businesses, your state may actually provide you workman’s compensation insurance. Be sure you are “rated” properly from the beginning. You are not a repair shop or a mobile repair business, so make that clear or your workers compensation rates will be very high and it will take a long time to get your rating changed.
Most auto detailing businesses with employees are rated “auto laundry” for workers compensation insurance. Auto laundry is one rating above car washing but several levels below auto repair. Have your agent give you a quote on this insurance, too. If you are the only individual and have no employees you may not need workers compensation insurance. Check with your state or insurance agency for details. This article is only intended to give you an overview of what you should consider and look for. You’re the one who will have to do you’re the homework and make sure you are properly insured.
When you shop for insurance, get two or three quotes and compare costs and coverages. It is not a bad idea to contact an insurance brokerage house that deals with many different carriers. You want a carrier with an A, A+ or A- rating. Typically the insurance carriers that write these types of premiums are also writing premiums for body repair shops, car washes, limousine companies and other automotive types of businesses. Start with your personal insurance company and see if they can give you a competitive quote. If they can’t, they should be able to refer you to an agency that can. You should “shop” your policy every two or three years. Just put it out there and get a quote! This keeps your insurance agent honest and helps protect you from paying too much.
As your business grows your insurance coverage needs will change. You may need additional coverage when working at airports, parking structures, parking lots of office buildings, condo properties and at car dealerships. As a mobile detailing operator you should always have a copy of your policy in your mobile rig just in case a property manager wants to confirm that you have the correct amount of coverage to be working on that particular commercial property.
And as you hire employees, be sure to have your insurance carrier check their driving record before you put them behind the wheel of a customer’s vehicle. If they have a poor driving history you may not be able to extend an employment offer to them or not allow them to move any of your customer’s vehicles.