Step 4: Insurance

If you plan on operating a detailing company, or even touching someone else’s vehicle in any way, insurance is a MUST. There are a million things that could happen to a vehicle while it is in your possession, and if you do not have insurance, only one outcome. The potential for loss from not being correctly covered could cost you more than your business, it could cost you every cent you have.

There are many different types of insurance for detailing companies, the following are a few examples of the type of coverage someone should have. Your coverage amounts and deductibles will change based on your location, type of business, and volume.

  • Business General Liability Insurance
    • Liability insurance is your over-all protection policy for the business
    • It covers if someone is hurt on your property or on a property where you are performing service.
    • It will also provide you legal representation in the case of a law suit, and pay damages if you are found negligent.
    • Most property managers, marinas, parking garages, etc … require that you carry at least a million dollars in liability insurance to be able to work on their property. They will also ask you to provide proof of the coverage before you are given permission to begin.
  • Garage Keepers Policy
    • The garage keeper’s policy was created to cover business like detailing, auto body, and mechanic shops.
    • The policy covers any damage that might occur to a customer’s vehicle while in your possession. That could mean while driving it, working on it, or while it sits.
  • Business Property Insurance
    • Business property insurance is similar to the Renters Insurance you would have on your house
    • It covers the property itself and anything that is contained inside or on it. This would include equipment, products, and fixtures.
    • It will cover such things as accidental direct physical damage, fire, and theft.
  • Commercial Vehicle Policy (Mobile units / Shop vehicles)
    • Like any normal auto policy, this will cover the vehicle against accidents or vandalism.
    • It will also cover any equipment that is a permanent fixture of the vehicle (i.e. bolted down) against theft or loss.
  • Workers Compensation Insurance (Employers Only)
    • The purpose of Workers Comp insurance is to cover you incase an employee gets injured on the job.
    • As the business owner, you choose to be included or excluded from the policy
    • It will cover against medical bills, paid time off, and potential law suits.
    • The amount of coverage required and individual rates are based directly off your over-all payroll, but will vary from state to state. Check with an insurance agent in your state to learn about applicable coverage and laws.

This might appear to be a lot of coverage, but generally speaking insurance is not that expensive when broken out over the course of a year. A few hundred dollars a month might seem like a lot to a small business, but if something does happen, and you do not have the proper insurance, you will find out the hard way just how expensive it is NOT to have insurance.

This is for information purposes only, and is not financial or legal advice. Please consult with a lawyer or accountant about your individual needs.