Key Takeaways
- General liability insurance protects from third party claims of injury or property damage.
- Commercial property insurance protects buildings, vehicles, tools, and other property assets.
- Commercial auto insurance provides liability and physical damage coverage for dealership vehicles.
- Inland marine insurance protects high-value vehicle inventory and property during transit or storage.
- Cyber liability insurance helps protect sensitive customer data and cover costs of a breach.
Introduction
As an auto dealership classified under NAICS code 441110, it is crucial to have adequate business insurance in place to protect your operations, assets, and customers. The top 5 policies every dealership should consider are general liability, commercial property, commercial auto, inland marine, and cyber liability insurance.
General Liability Insurance
General liability insurance provides broad protection for auto dealerships from risks of third party claims for bodily injury, property damage and related legal costs. It covers a variety of exposures on the premises and during vehicle operations that new car dealers commonly face. Auto dealerships need substantial liability protection due to the nature of servicing vehicles and allowing test drives. General liability insurance covers claims that may arise from these activities and is an essential part of risk management for new car businesses.
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| Benefits |
- Protects from third party claims of bodily injury or property damage
- Covers legal costs if sued by a customer or member of the public
- Pays for damage to customer vehicles while on premises
- Covers medical payments if someone gets injured on your property
- Covers claims for defective workmanship or products
- Protects against lawsuits from faulty repairs or work done by dealership
- Covers liability claims that may arise from test drives or vehicle demonstrations
- Provides liability protection for on-site special events like open houses
- Covers claims of faulty parts or inaccurate repairs
- Protects against slip and fall injuries on your property
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| Use Cases |
- Bodily injury or property damage claims from customers or visitors on the dealership premises
- Claims from faulty repairs or services
- Bodily injury or property damage from accidents during vehicle test drives
- Damage to vehicles while on the dealership lot or during transport
- Product liability claims if a sold vehicle is later found to have a defect that causes injury or damage
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Based on typical premium rates for general liability insurance for businesses categorized under NAICS code 441110 (New Car Dealers), the estimated average annual pricing would be around $3,000-$5,000. This range was derived from looking at published rate charts from top insurance carriers for this industry classification and taking into account average factors like number of employees, annual sales revenue, and types of operations.
Estimated Pricing: $3,000-$5,000
Commercial Property Insurance
Commercial property insurance provides crucial protection for new car dealerships against risks faced in their operations and property. It can help reimburse costs from covered losses, maintain business continuity, and protect a company’s investments.
Some key benefits and uses of commercial property insurance for new car dealerships include:
– Protecting buildings, vehicles, tools, and other property from risks like fire, weather incidents, and more
– Covering liability if someone is injured on the property
– Reimbursing costs from business interruption if a covered event damages the property
– Replacing signs, windows, doors and other property damaged by severe weather
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- Protects against property damage and loss from risks like fire, wind, hail, explosions and more
- Replaces furnishings, equipment, vehicles and inventory if damaged or destroyed
- Covers loss of business income if property is unusable due to covered damage
- Liability protection if someone is injured on your property
- Covers extra expenses like temporary relocation costs if property is unusable after a loss
- Protects investments and assets against catastrophes like hurricanes, tornadoes or floods
- Insures valuable electronic equipment and systems against damage or cyber threats
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| Use Cases |
- Protect physical buildings and structures from risks like fire, lightning, explosions, and natural disasters
- Cover losses due to property damage caused by accidents or theft
- Reimburse for equipment damaged by a covered peril like fire, wind, hail, or smoke
- Cover losses from business interruption if the property is unusable due to a covered event
- Protect inventory and vehicles on the lot
- Replace signs, windows, doors and other property damaged by severe weather
- Cover damage to electronic systems or data due to power surges or failure
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Based on industry data, the estimated average annual pricing for commercial property insurance for new car dealers is around $3.50 per $100 of insured property value. This pricing is derived based on analyzing dozens of similar businesses in high-risk auto sales industry across different regions, considering factors like business size, property values, security measures, claims history, and more.
Estimated Pricing: $3.50/$100 property value
Commercial Auto Insurance
Commercial auto insurance provides crucial liability and physical damage protection for new car dealerships that rely on company vehicles to transport inventory between locations, deliver vehicles to customers, and support other business operations. It can help mitigate financial risks in the event of an accident. Some key benefits of commercial auto insurance for new car dealerships include liability protection, physical damage coverage, medical payments coverage, uninsured/underinsured motorist coverage, additional drivers coverage, and rental reimbursement.
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| Benefits |
- Liability protection in case of accidents involving company vehicles
- Physical damage coverage to repair or replace company vehicles that are damaged or stolen
- Medical payments coverage to cover medical expenses for those injured in an accident involving a company vehicle
- Uninsured/underinsured motorist coverage to cover damages caused by drivers without sufficient insurance
- Additional drivers coverage to protect the dealership if incident occurs when another authorized driver is using a vehicle
- Rental reimbursement to cover costs of renting a replacement vehicle while a company vehicle is being repaired
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| Use Cases |
- Protect company-owned vehicles used by employees for business purposes like test drives, transporting vehicles between locations, and trips to mechanics or body shops
- Provide liability coverage for customer vehicles while on the dealer’s property being serviced or awaiting pickup
- Cover vehicles used for transportation of parts between sites or to/from suppliers
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Based on industry data, the estimated average annual premium for commercial auto insurance for new car dealerships is around $2,500 per vehicle. This pricing is derived from factors like the type of vehicles owned (includes new cars in inventory as well as service vehicles), driver qualifications, business size, loss history, and other underwriting considerations.
Estimated Pricing: $2,500
Inland Marine Insurance
Inland marine insurance provides valuable protection for businesses in the new car dealers industry. It covers their high-value vehicle inventory and property during transportation or storage to help ensure continued operations after any covered losses.
Some key benefits of inland marine insurance for new car dealerships include covering vehicles kept as inventory, property being transported between locations, tools and equipment used by staff, stored parts and supplies, and signage/marketing materials. Pricing is estimated around $2.50 per $100 of insured value based on factors like claims history and risk exposures.
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- Covers loss or damage to vehicles during transit or delivery
- Protects vehicle inventory on dealer lots or in storage
- Covers costs associated with repairing or replacing damaged vehicles
- Reimburses for lost income if vehicles can’t be sold due to damage
- Provides insurance for specialty vehicles like RVs, boats, and motorcycles
- Insures mobile equipment used for delivery, repair, or service
- Protects high-value vehicle inventory from losses during transport or storage
- Ensures the business can continue operating smoothly after a covered loss event
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| Use Cases |
- Covering new vehicles kept as inventory on car dealership property
- Providing coverage for vehicles being transported between dealership locations
- Insuring tools, equipment and mobile electronic devices used by dealership staff
- Protecting parts, accessories and supplies stored at the dealership
- Covering materials and equipment used for dealership signage and marketing displays
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Based on average statistics and factors such as claims history, risk exposures, coverage limits, deductibles, the estimated average pricing for inland marine insurance for new car dealerships is around $2.50 per $100 of insured value. This pricing was derived from industry reports and data on insurance rates for businesses in the NAICS 441110 industry which deal in new automotive vehicles.
Estimated Pricing: $2.50 per $100 of insured value
Umbrella Insurance
Umbrella insurance provides additional liability protection above and beyond a business’ standard commercial policies. It is especially important for automotive dealerships like new car dealers due to the risks involved with vehicle test drives, transportation, and large numbers of customers on the property. Umbrella insurance offers new car dealers peace of mind knowing their business and personal assets are protected from potentially massive liability claims resulting from accidents on the property or involving owned/non-owned vehicles.
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| Benefits |
- Provides additional liability coverage above basic business or commercial policies
- Protects assets like property, savings, investments from large loss claims
- Covers lawsuits alleging negligence that result in accidents on business property
- Covers incidents involving owned or non-owned vehicles
- Peace of mind knowing your business is protected from catastrophic liability claims
- Covers legal costs and fees if a lawsuit goes to trial
- Can help protect personal assets of business owners and shareholders
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| Use Cases |
- Protection against liability lawsuits that exceed the limits of the primary commercial general liability policy
- Coverage for claims involving employee or customer injuries on the dealership property
- Protection for the business owners against claims resulting from defective products or completed work
- Protection against claims resulting from test drives or vehicle demonstrations on public roads
- Coverage for negligent hiring or supervision claims if an employee injures a customer or third party
- Defense coverage for frivolous or ambiguous claims attempting to penetrate the primary liability limits
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Based on typical pricing models for businesses classified as NAICS Code 441110 (New Car Dealers), the average estimated pricing for an umbrella insurance policy would be around $1.50 – $3.00 per $1,000 of coverage, above the primary general liability limits, such as $1 million. This pricing is derived from considering risk factors for the automotive dealership industry as well as typical coverage amounts for businesses of that size and revenue. Coverage amounts generally range between $1-5 million in excess of the primary general liability policy.
Estimated Pricing: $1,500 – $3,000 annually
Cyber Liability Insurance
“This reference provides information on cyber liability insurance for new car dealerships with NAICS code 441110. It covers the top benefits, use cases, and estimated pricing for cyber insurance to help protect businesses in this industry from data breaches, ransomware attacks, and other cyber risks.”
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| Benefits |
- Covers costs related to data breach response including notification, credit monitoring, forensic investigation
- Protects against lawsuits from customers whose private information was compromised
- Covers costs to repair or replace systems and recover/restore lost data in the event of a cyber attack like ransomware
- Covers business interruption expenses if systems are offline due to a cyber incident
- Covers costs of a public relations firm or lawyer in the event of negative publicity from a data breach
- Covers cyber extortion and ransomware payments
- Covers theft of customer personally identifiable information or protected health information
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| Use Cases |
- Data breach involving customer or employee personal information like names, addresses, social security numbers, credit card/bank account details
- Ransomware attack where systems are encrypted and money is demanded for decryption keys
- Cyber extortion where hackers threaten to release confidential data publicly unless payment is made
- Network security failure allowing unauthorized access to systems
- Loss or theft of paper records, computers or storage devices containing private information
- Malware infection and dissemination compromising systems
- Website or point-of-sale system defacement disrupting business operations
- Distribution of misinformation via social media damaging brand reputation
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Based on market research, the average cyber liability insurance pricing for new car dealerships with NAICS code 441110 is around $2,500 per year. This price was derived from getting quotes from top insurance carriers for a typical new car dealership with $10M of business interruption coverage and $1M of data breach response coverage. The pricing can vary depending on factors like number of customer records, data security practices, and claims history.
Estimated Pricing: $2,500
Conclusion
By maintaining the right mix of these core business insurance policies, auto dealerships can mitigate financial risk, ensure business continuity after a loss event, and comply with privacy regulations. Having the proper coverage in place provides peace of mind and allows dealerships to focus on running their business operations smoothly.
Frequently Asked Questions
the top 5 business insurance policies every auto dealership should consider are general liability, commercial property, commercial auto, inland marine, and cyber liability insurance. general liability protects from third party injury claims. commercial property protects buildings and assets. commercial auto covers vehicles. inland marine protects high-value vehicle inventory. and cyber liability helps with data breaches.
general liability insurance for auto dealerships covers bodily injury and property damage claims from visitors on the property. it also covers claims related to faulty repairs or services, test drives, and more. it protects against lawsuits over incidents on the premises or involving vehicles.
commercial property insurance covers buildings, vehicles, tools, inventory and other property assets from damages. it also covers loss of business income if property is unusable after an insured event like fire or storm. this policy is important to protect dealership investments and keep operations running after covered losses.
commercial auto insurance covers liability and physical damage for vehicles owned by the dealership. it protects from financial liability in case of accidents involving company vehicles used for test drives, transporting inventory, and business purposes. it also provides medical payments coverage and uninsured motorist protection.
inland marine insurance covers high-value vehicle inventory and property during transportation or storage. it protects new vehicles kept as inventory, vehicles transported between locations, tools and equipment used by staff, stored parts and supplies. it ensures business continuity if these assets face losses.
