Key Takeaways
- General liability insurance protects against claims from customer injuries or vehicle damage during services
- Commercial property insurance replaces equipment, tools and facilities damaged by fires, storms or other disasters
- Workers’ compensation covers medical costs and lost wages if employees get hurt on the job
- Commercial auto insures company vehicles and provides liability coverage for vehicles on the premises
- A business owner’s policy combines coverages into one cost-effective package
- Umbrella insurance provides extra liability protection above primary policy limits
Introduction
As an automotive oil change and lube shop, it is crucial to protect your business from financial losses through adequate insurance coverage. This guide examines the top business insurance policies these types of operations should consider to mitigate risks.
General Liability Insurance
General liability insurance provides important coverage for automotive oil change and lube shops to protect them from financial losses due to accidents and injuries that may occur on their premises or during maintenance work on vehicles. It is crucial for these businesses since they work directly on customer vehicles, where accidents can happen. General liability insurance covers costs of vehicle damage, injuries to customers or employees, and environmental damage from improper disposal of automotive fluids. Pricing is typically $2,000-$3,000 annually based on business factors like revenue, employees, claims history and safety protocols.
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Based on average data and risk factors for this industry, the estimated annual pricing for general liability insurance would be around $2,000-$3,000. This estimate takes into account factors like gross revenue, number of employees, claims history, safety protocols and certifications. The final price offered can vary depending on the individual business’s unique risk profile which is assessed during the underwriting process.
Estimated Pricing: $2,000-$3,000
Commercial Property Insurance
Commercial property insurance is an important coverage for automotive oil change and lubrication shops to protect their investment and ensure business continuity. It covers costs in the event of property damage, theft, liability issues and lost income if repairs are needed.
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Based on industry data and average costs, the estimated annual pricing for commercial property insurance for automotive oil change and lubrication shops would be around $2,500 – $3,500. This pricing was derived considering average property values of $500,000 – $750,000 which is typical for such shops. Other factors like location, risk level, protection limits were also averaged to arrive at this estimate.
Estimated Pricing: $2,500 – $3,500
Workers Compensation Insurance
Workers compensation insurance provides important protections and compliance for businesses in the automotive oil change and lubrication industry. It covers medical expenses and lost wages if employees get injured on the job from common risks like slips and falls, repetitive strain, toxic chemical exposure, and being hit by vehicles or equipment. The estimated average cost is $1.25-$1.50 per $100 of payroll to help protect the business from financial loss due to workplace injuries and lawsuits.
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Based on national averages, the estimated average workers’ compensation insurance pricing for automotive oil change and lubrication shops is approximately $1.25 – $1.50 per $100 of payroll. This pricing is derived from taking into account factors such as the shop’s payroll, experience modification factor, and the risk/hazard level of the industry which is considered slightly above average risk.
Estimated Pricing: $1.25 – $1.50 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance provides important coverage for businesses like automotive oil change shops that work with vehicles. It protects these operations from liability risks and ensures their ability to continue serving customers after incidents. Additionally, this type of insurance reimburses expenses related to injuries of employees while on duty and covers costs no matter who is at fault in an accident involving a company vehicle. It also replaces damaged tools, equipment and business vehicles used in daily operations if needed.
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Based on typical insurance rates and risk factors for businesses in the automotive oil change and lubrication shop industry (NAICS code 811191), the estimated average annual pricing for commercial auto insurance would be around $2,000-$3,000 per vehicle. Rates are calculated based on number of vehicles, driver qualifications, prior claims/violations, and other risk factors. Larger fleets may qualify for lower per vehicle rates.
Estimated Pricing: $2,000-$3,000
Business Owner’S Policy
A business owner’s policy, or BOP, is a packaged business insurance policy that provides property and liability coverage tailored for businesses in the automotive oil change and lubrication industry. The BOP offers comprehensive protection for automotive shops by combining coverages for property damage, general liability, loss of business income, auto insurance, and other important coverages like employee dishonesty and money and securities into one cost-effective policy.
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Based on average data, the estimated annual pricing for a basic business owner’s policy for an automotive oil change and lubrication shop would be around $1500. This was derived from looking at average exposure values such as annual revenue, number of employees, property values and comparing to industry benchmarks. The price could vary depending on individual shop’s risk factors and coverage levels selected.
Estimated Pricing: $1500
Umbrella Insurance
Umbrella insurance provides valuable extra liability protection for automotive oil change and lubrication shops. It covers losses that exceed the business’s standard commercial policy limits, helping to protect against expensive lawsuits. Some key benefits of umbrella insurance for these types of businesses include protecting assets from large claims, providing additional liability coverage above primary limits, and covering legal costs if sued for amounts above standard insurance. Common risks it helps mitigate include injuries to customers on premises, errors leading to vehicle damage, work injuries to employees, and environmental incidents which could result in costly claims. Estimated average annual premium for $1M in coverage is around $1,500 assuming good claims history and factors specific to oil change risks.
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Based on typical pricing for umbrella insurance policies and risks in the automotive oil change industry, the estimated average annual premium would be around $1,500. This pricing assumes the business has $1 million in coverage and a good claims history with no major lawsuits or settlements in the past 5 years. The premium is calculated based on general liability risk factors specific to oil change shops such as vehicle lifting equipment, potential for fluid spills, and customer/employee injuries.
Estimated Pricing: $1,500
Commercial Cyber Insurance
Commercial cyber insurance can help protect automotive oil change and lubrication shops from financial risks. It reimburses costs of responding to cyber attacks and helps minimize disruptions to business operations. It covers costs associated with data breaches, ransomware attacks, liability lawsuits, and investigating incidents affecting customer privacy. Premiums typically range from $750-$1,500 annually depending on factors like number of employees and annual revenue.
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After examining risk factors such as number of employees and revenue of typical automotive oil change and lubrication shops, the estimated average annual premium for commercial cyber insurance would be $750-$1,500. This pricing is derived based on commonly used factors such as number of employees, annual revenue, cyber security practices and controls in place. Shops with fewer employees and lower annual revenue would be at the lower end of the range, while larger shops with more employees and higher revenue would be at the higher end.
Estimated Pricing: $750-$1,500
Conclusion
By choosing the right insurance solutions outlined in this guide, automotive oil change shops can feel confident their business is protected from unexpected losses and have the resources to recover after accidents or claims. Maintaining proper coverage helps ensure business continuity and peace of mind for operations in this industry.