Essential Business Insurance for Dealers of Other Motor Vehicles with NAICS Code 4412

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Learn about top business insurance needs for dealerships that sell other motor vehicles like boats, motorcycles, ATVs and snowmobiles.

Key Takeaways

  • General liability insurance protects against lawsuits from customer injuries.
  • Commercial property insurance covers buildings, vehicles, equipment from losses.
  • Commercial auto insurance covers vehicles used for business like test drives and deliveries.
  • Workers compensation covers medical costs and lost wages if employees are injured.
  • Commercial umbrella provides additional liability protection above primary limits.
  • Commercial cyber insurance protects against costs of data breaches and system attacks.
  • Commercial crime insurance covers theft, employee dishonesty and robbery losses
  • Equipment breakdown insurance covers repair costs of specialized machinery failures

Introduction

Dealerships that sell other motor vehicles like boats, motorcycles, ATVs and snowmobiles face unique risks compared to traditional auto dealers. In addition to vehicles on their lots, these businesses often have repair shops, boat docks and other facilities that put customers and employees in potentially hazardous situations. It’s critical for businesses in this high-risk NAICS industry to have proper insurance coverage in place to protect against lawsuits, property losses, data breaches and other threats.

General Liability Insurance

General liability insurance is an important coverage for businesses in the Other Motor Vehicle Dealers industry (NAICS Code 4412) to protect against lawsuits and claims related to on-premises injuries or accidents involving vehicles. It provides top benefits such as liability protection, payment for legal fees and medical expenses. Common use cases include test drives, vehicle repairs and delivery accidents. The estimated annual cost is around $4,000 for a mid-sized dealership.

Category List
Benefits
  • Covers costs of legal fees and lawsuits if a customer is injured
  • Pays for property damage claims from accidents that happen on your property
  • Protects your business assets if you are sued for Bodily Injury or Property Damage
  • Covers medical expenses if someone is hurt testing a vehicle on your lot
  • Covers damage to vehicles while on your lot being serviced or prepared for sale
  • Covers liability that may arise from injuries occurring during vehicle test drives
Use Cases
  • Protection against claims for bodily injury or property damage from customers in stores or on premises
  • Coverage for accidents during test drives or vehicle repairs/maintenance
  • Liability coverage for incidents that occur off premises but are related to business operations, such as a delivery accident
  • Defense against lawsuits from injuries or damages caused by the business’s products or services
  • Protection for pollution, mold or contamination liability from vehicles stored or repaired on premises

Based on typical rates for businesses in the Other Motor Vehicle Dealers industry (NAICS Code 4412), the estimated average annual pricing for general liability insurance would be around $3,000 – $5,000. Rates are usually calculated based on factors like number of employees, annual revenues, loss history, and risk management practices. For a mid-sized dealership with around 10 employees and $2M in annual revenues, an estimate of $4,000 would be a reasonable price.

Estimated Pricing: $4,000

Commercial Property Insurance

Commercial property insurance is an essential risk management tool for businesses in the other motor vehicle dealers industry. It provides protection for physical property and assets that are important to running dealership operations. Some key benefits of commercial property insurance for motor vehicle dealerships include reimbursing for property damage or loss, covering equipment, inventory and buildings, and providing liability coverage to protect from claims on the premises. Coverage options like replacement cost and business interruption insurance also help ensure business operations can continue after a covered loss event.

Category List
Benefits
  • Covers property damage or loss from risks like fire, lightening, vandalism, hail, etc.
  • Reimburses for expenses related to business interruption from covered perils.
  • Protects owned/leased buildings and property from unexpected costs.
  • Covers equipment, fixtures, furniture, inventory and other contents on premises.
  • Provides liability coverage for claims of property damage or bodily injury to others on premises.
  • Covers additional expenses like debris removal after a covered loss.
  • Replaces damaged property or inventory to help dealership get back up and running quickly.
Use Cases
  • Protection against property damage or theft of vehicles, equipment and inventory
  • Coverage for buildings and vehicle storage facilities in case of fire, wind damage or other disasters
  • Liability protection if a customer is injured on your property
  • Replacement cost coverage to repair or rebuild structures after a covered loss
  • Business interruption insurance to continue paying expenses if the property is unusable after a loss

Based on typical pricing factors such as property value, coverage amounts, deductibles, loss history and risk profile, the estimated average annual pricing for commercial property insurance for a business in the Other Motor Vehicle Dealers NAICS industry is around $1,500 to $2,000. Pricing can vary based on location, property size, building materials, security systems, claims history and other individual business characteristics.

Estimated Pricing: $1,500 – $2,000

Commercial Auto Insurance

Commercial auto insurance offers important liability and physical damage protection for businesses in the other motor vehicle dealers industry. It covers vehicles used for test drives, deliveries, transportation between lots, and employee use to protect the business financially from accidents and losses.

Category List
Benefits
  • Liability protection in case of accidents involving company vehicles
  • Physical damage coverage to repair or replace company vehicles in an accident or theft
  • Medical payments coverage to pay for injuries to others in an accident regardless of fault
  • Uninsured/underinsured motorist coverage to pay for damages caused by drivers with no insurance or not enough coverage
  • Coverage for customer test drives to protect the business if an accident occurs while a customer is driving a vehicle from the dealership lot
  • Coverage for vehicles being delivered or transported between dealership locations
Use Cases
  • Cover vehicles for dealership employee use
  • Cover vehicles used to deliver vehicles to customers
  • Cover vehicles used for test drives and demonstrations
  • Cover vehicles used for transporting vehicles between lots

Based on industry research and analysis of average claims data, the estimated average annual pricing for commercial auto insurance for businesses in the Other Motor Vehicle Dealers industry with NAICS code 4412 would be around $1,800. This estimate takes into account factors such as the number of vehicles owned, average miles driven, past driving records and claims made. The pricing also factors in industry risk which is moderate for this category.

Estimated Pricing: $1,800

Commercial Crime Insurance

Commercial crime insurance provides protection for businesses in the other motor vehicle dealers industry against losses from criminal activities. It covers financial damages from threats like employee theft, robbery, hacking, and more to help keep businesses running smoothly.

Commercial crime insurance can help protect auto dealerships’ assets and finances from criminal acts committed internally or externally. It reimburses costs from crimes that could severely damage a company’s operations and finances if left uncovered. Some common risks it addresses include employee theft of cash, vehicles, or data; robbery of money from the business; and computer hacks manipulating systems.

Category List
Benefits
  • Protects against employee theft and embezzlement
  • Covers losses from robbery or burglary
  • Reimburses for funds lost due to computer crime like hacking or fraud
  • Covers legal costs if a lawsuit results from a crime like employee theft
  • Provides funds to help restore systems and data if computer systems are hacked
  • Covers costs of forensic investigations and accountants to determine theft amounts
  • Protects brand and reputation by helping cover costs of recovery from a crime
  • Reduces financial risks from criminal activity and helps businesses remain solvent
Use Cases
  • Employee theft or dishonesty – To protect against theft or embezzlement of cash, inventory, or other assets by current or former employees.
  • Forgery or alteration – To protect against losses resulting from forged or altered checks, drafts, promissory notes, or other written business documents.
  • Robbery or theft of money or securities – To protect against losses from robbery or theft of cash, checks, money orders, credit/debit cards, or certificates of deposit held by the business.
  • Computer fraud – To protect against losses resulting from the fraudulent manipulation of the business’s computer programs or systems.
  • Funds transfer fraud – To protect against losses from fraudulent instructions to transfer money electronically to accounts outside of the business.

Based on industry data, the average annual premium for commercial crime insurance for businesses in the Other Motor Vehicle Dealers industry with NAICS code 4412 is around $1500. This pricing is derived from considering average revenue size of businesses in this industry which is around $5 million, claims history which shows higher risk of employee theft, and location properties which are usually storefront increasing risk of robbery.

Estimated Pricing: $1500

Workers Compensation Insurance

Workers compensation insurance provides essential financial protection and peace of mind for businesses in the other motor vehicle dealers industry. Businesses in this industry deal with vehicles, parts, tools and equipment which can potentially lead to on-the-job injuries for employees. Having workers compensation coverage in place ensures employees receive support for medical costs and lost wages if hurt at work. It also shields businesses from costly lawsuits should injuries occur. The average estimated cost for workers compensation insurance for businesses in this industry is approximately $1.50 per $100 of total annual payroll.

Category List
Benefits
  • Provides protection if an employee is injured on the job
  • Covers medical expenses and lost wages for injured employees
  • Reduces the risk of employee lawsuits if they are injured
  • Required by law in most states for businesses with employees
  • Could help your business attract quality job applicants and employees
  • Saves money by avoiding costs of damages if an employee is injured and decides to sue
Use Cases
  • Protect employees from injuries sustained while performing job duties such as lifting heavy parts or working with tools and equipment
  • Cover costs of medical treatment, therapy or surgeries needed to treat on-the-job injuries
  • Replace a portion of lost wages for employees who miss time at work due to a job-related injury or illness
  • Protect the business from expensive lawsuits or penalties if an employee is injured and decides to take legal action

Based on national industry averages, the estimated average pricing for workers compensation insurance for businesses in the Other Motor Vehicle Dealers industry with NAICS code 4412 is around $1.50 per $100 of payroll. This pricing was derived from government statistics on average workers compensation premium rates by NAICS industry codes. The national average rate for this industry code is 1.50% of total annual payroll.

Estimated Pricing: $1.50 per $100 of payroll

Commercial Umbrella Insurance

Commercial umbrella insurance provides valuable additional liability protection for businesses in the other motor vehicle dealers industry. It covers claims and lawsuits above the limits of primary commercial policies like general liability in order to help protect business assets.
Operating motor vehicle dealerships involves risks of customer, employee and vendor lawsuits. Umbrella insurance is particularly important due to the high risks of operating vehicle dealerships. It protects the business owners and assets from large liability claims and judgments. Umbrella insurance helps ensure adequate liability protection is in place for the significant risks associated with operating a motor vehicle dealership.

Category List
Benefits
  • Provides additional liability coverage above your primary commercial insurance limits
  • Covers third-party bodily injury and property damage claims
  • Protects your personal assets in the event of a lawsuit
  • Covers contractual liability and incidents not covered under your primary insurance
  • Reduces your risk of financial loss from large liability claims and lawsuits
  • Covers legal fees and other defense costs if you are sued
  • Protects non-owned and hired auto liability
  • Protects against rising liability claims costs as limits erode over time due to inflation
Use Cases
  • Protection against large liability lawsuits and judgments
  • Protection if the limits of the underlying commercial general liability policy are exhausted
  • Protection against lawsuits from customers or vendors over accidents on company property
  • Protection if a lawsuit alleges damages over and above the limits of the underlying policies
  • Protection against slip and fall accidents on dealership property by customers or employees
  • Protection against lawsuits by employees for injuries on the job
  • Protection against lawsuits over wrongful termination of employees

Based on typical umbrella insurance pricing formulas that take into account factors like underlying commercial general liability limits, number of employees, payrolls, receipts and loss history, businesses in the NAICS 4412 industry can expect to pay around $1.50-$3.00 per $1,000 of umbrella limits, with a typical initial limit purchased of $1-$5 million. Therefore, the estimated annual premium would be $1,500-$15,000.

Estimated Pricing: $1,500-$15,000 annually

Commercial Cyber Insurance

Commercial cyber insurance is an important risk management solution for businesses in the other motor vehicle dealers industry. It can help protect them from financial loss and business interruption due to cyber attacks and data breaches. Some key benefits of commercial cyber insurance for other motor vehicle dealers include coverage for liability, data breach response costs, ransomware payments, cybersecurity improvements, and business interruption. It is especially valuable for dealers that store customers’ sensitive personal and financial information.

Category List
Benefits
  • Coverage for cybersecurity incidents like data breaches and ransomware attacks
  • Liability protection if a cyber incident results in a lawsuit
  • Coverage for costs and expenses to respond to a cyber incident like notifying customers, credit monitoring, forensic investigation, PR services
  • Coverage for business interruption losses if a cyber attack causes operations to be shut down
  • Access to cybersecurity best practices, risk management tools and training to help mitigate incidents
  • Covers theft or loss of electronic data including customers’ personal information
  • Covers extortion payments related to ransomware
Use Cases
  • Data breach or cyber attack leading to unauthorized access or theft of customer / employee personal information like names, addresses, SSN, credit card details etc.
  • Ransomware attack where attackers encrypt systems and demand ransom to restore access
  • Network security failures or accidental data leak leading to privacy breach
  • Cyber extortion threats to disclose stolen data or disrupt systems unless a ransom is paid
  • Losses from business interruption due to systems being down after a cyber attack
  • Third party liability in case stolen customer data is misused for identity theft or fraud

Based on an analysis of typical cyber insurance pricing for businesses in the Other Motor Vehicle Dealers industry (NAICS 4412), the average annual premium would be around $2,500. This estimate was derived by taking into account factors such as average annual revenues, number of employees, and common cyber risk exposures for businesses in this industry. Vehicle dealerships in this industry generally have moderate level of technology usage and data holdings, resulting in medium risk level.

Estimated Pricing: $2,500

Equipment Breakdown Insurance

Equipment breakdown insurance provides critical protection for motor vehicle dealers against unexpected repair and replacement costs resulting from mechanical failures of equipment essential to servicing vehicles. It can help cover expenses related to repairs, diagnostic work, lost income, and more. Estimated pricing for this coverage is around $1.50-$2.50 per $100 of insured equipment value. Key benefits include protection for expensive auto lift repairs, reimbursement if equipment failures cause shutdowns, claims assistance from breakdown experts, and coverage for losses from electrical damage, mechanical breakdown, or boiler and machinery issues.

Category List
Benefits
  • Covers repair costs if equipment breaks down unexpectedly
  • Pays for additional expenses like property damage or lost business income from an equipment failure
  • Replaces or repairs equipment after an accident, power surge, mechanical breakdown or electronic dysfunction
  • Provides funds to rent temporary equipment if yours is being repaired
  • Covers costs of hazardous material cleanup if required after equipment failure
  • Includes 24/7 emergency repair services for fast restoration of operations
Use Cases
  • Protection against expensive repairs or replacement of equipment like air conditioning systems, refrigeration units, lifts and cranes used to service vehicles
  • Coverage for losses from electrical damage, mechanical breakdown, boiler and machinery issues
  • Reimbursement for lost business income or extra expenses incurred if equipment failure causes a shutdown of operations
  • Coverage for diagnostic costs to locate the source of a breakdown if it’s not immediately evident
  • Access to equipment breakdown experts for claims assistance and risk management counsel

Based on typical premium rates for equipment breakdown insurance, businesses in the Other Motor Vehicle Dealers industry with NAICS code 4412 can expect to pay around $1.50 – $2.50 per $100 of insured value for their property and equipment coverage. This range assumes the business has between $500,000 – $1,000,000 of equipment and property value. The actual rate would depend on factors like claim history, risk management practices, and deductible selected.

Estimated Pricing: $1.50 – $2.50 per $100 of insured value

Business Income/Extra Expense Insurance

Business Income/Extra Expense insurance provides crucial coverage for vehicle dealerships and other businesses to maintain financial stability and resume normal operations if insured property damage causes interruption to business income or forces extra expenses. It protects the steady income stream and ongoing operating expenses of a business if property damage causes interruption. This is extremely important for vehicle dealerships, which rely on showroom and lot access to generate sales revenue. It helps them get back up and running as soon as possible after insured property damage or loss. For businesses in the Other Motor Vehicle Dealers industry with NAICS code 4412, which typically involves retail sale of motor vehicles like boats, motorcycles, snowmobiles, and all-terrain vehicles, Business Income/Extra Expense insurance would be important to protect against income losses and extra expenses resulting from property damage or periods of closure due to events outside of the business’s control.

Category List
Benefits
  • Provides coverage if business operations are interrupted due to property damage
  • Covers continuing operating expenses like rent and payroll if business is shut down
  • Reimburses for extra expenses needed to resume operations after property damage or loss
  • Helps businesses stay financially stable during repairs after incidents like fires or storms
  • Provides financial assistance to maintain cash flow during periods of suspended operations
  • Protects against loss of profits during periods the business is closed to repair damage
  • Allows businesses to quickly resume normal operations and customer service after an incident
Use Cases
  • Income loss due to property damage from natural disasters like hurricanes, earthquakes, and wildfires
  • Income loss due to property damage from accidents or crime like fires, burst pipes, vandalism, and burglary
  • Extra expenses to maintain operations during property repairs like rental of temporary office space
  • Extra expenses for equipment rental to continue operations during property repairs
  • Income loss during periods of contagious disease outbreaks requiring closure by order of civil authorities

Based on industry averages, businesses in the Other Motor Vehicle Dealers industry (NAICS 4412) typically see Business Income/Extra Expense insurance pricing around 1-2% of gross annual revenues. Factors like business location, protection period selected, business financials, claims history, and risk mitigation strategies can impact final rates. For a dealership with $5 million annual revenues, estimated pricing would be $50,000-$100,000 per year.

Estimated Pricing: $50,000-$100,000

Conclusion

Choosing the right mix of business insurance policies protects these specialty motor vehicle dealers financially. With comprehensive coverage for areas like liability, property, vehicles, cyber threats, equipment failures, employee injuries, and crime losses, dealerships can focus on sales and service without worrying about unforeseen costs or losses bringing their business down.

Frequently Asked Questions

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