Operating an auto dealership can be an exciting, lucrative and rewarding venture. However, your business must also manage many risks and exposures. Given the high value of your inventory, heavy foot traffic throughout your workplace and significant financial stakes invested by your customers, dealerships must have sufficient risk management and loss control practices in place. A robust and diverse insurance portfolio may prove to be an invaluable investment. 
What Types of Insurance Do Car Dealerships Need?
Although all auto dealerships have unique circumstances, the following types of coverage can generally form the core of your insurance package:
- General liability insurance—This coverage may provide financial assistance if the following incidents occur on your premises and/or impact a third party:
- Bodily injury
- Property damage
- Personal and advertising injury (e.g., slander, wrongful imprisonment, false advertising, copyright infringement)
- It may also be advantageous for dealerships to consider adding garage liability insurance, specifically intended for the automotive industry and can augment your general liability coverage.
- Product liability insurance—If a vehicle or other product you sold to a customer proves to be defective and results in bodily injury or property damage, this coverage can help pay for the following:
- Medical expenses
- Legal representation
- Settlements and judgments
- Garage keepers insurance—By including this policy in your insurance portfolio, your dealership can be protected financially from incidents involving customers’ vehicles left in your possession, such as for storage or having services performed.
- Commercial property insurance—This type of coverage can help pay for repair and replacement costs if property used to operate your dealership is damaged, such as the following:
- Structures
- Inventory
- Equipment
- Tools
- Furniture
- Signage
- Landscaping
Some dealerships may also want to consider adding open lot insurance to protect vehicles further being stored on a lot for resale.
- Commercial auto insurance—This coverage can provide financial resources to help pay for losses and damages involving vehicles used by your dealership. An adequate policy will generally include the following:
- Bodily injury liability coverage
- Property damage liability coverage
- Collision coverage
- Comprehensive coverage
- Uninsured/underinsured motorist coverage
- Business interruption insurance—If a covered incident affects your dealership’s ability to conduct its normal operations, this type of policy, also known as business income insurance, may help cover the following costs and losses:
- Rent
- Lost income
- Employee payroll
- Tax and loan payments
- Workers’ compensation insurance—If your employees are injured on the job or develop a work-related illness, this coverage can provide financial assistance for the following losses and expenses:
- Medical bills
- Lost or reduced earnings
- Disability benefits
- Death benefits
- Legal costs
- Equipment breakdown insurance—This coverage can insulate you from losses and damages arising from machinery breaking down, including the following:
- Repairing or replacing damaged equipment
- Lost income
- Spoiled inventory
- Cyber liability insurance—By including this coverage in your insurance portfolio, your business can access financial resources to help pay for the following expenses related to a data breach or other cyber incident:
- Notifying affected parties
- Repairing or restoring compromised systems
- Ransomware payments
- Lost income
- Hiring additional staff
- Settlements and fines
Get the Right Coverage
We’re here to help. At Insurance Agencies Inc., we have nearly 150 years of experience assessing and addressing the coverage needs of individuals, families and businesses. We are well-equipped to help dealerships in Brigantine Beach, Ventnor City, Margate City, Longport and the surrounding areas build optimal insurance portfolios.
Visit our website or call 609-646-1000 to get started.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.