Key Takeaways
- General liability insurance protects from lawsuits if a student is injured during lessons.
- Automobile liability insurance covers legal costs if a student driver causes an accident.
- Commercial property insurance covers damage to buildings and equipment from incidents.
- Commercial auto insurance provides coverage for vehicles used in driving lessons.
- Business owners insurance packages together common insurance policies for one price.
- Umbrella insurance provides additional liability protection above other policies.
Introduction
As an automobile driving school, it is crucial to protect the business from risks associated with student drivers learning behind the wheel. Several types of business insurance policies are important to consider including general liability, commercial auto, commercial property, business owners and umbrella insurance. These complimentary coverages work together to safeguard the school financially.
General Liability Insurance
General liability insurance protects automobile driving schools from financial losses due to incidents during driving lessons. It covers legal costs, medical bills, property damage, loss of income, and other expenses if a student, instructor, or third party is injured or their property is damaged during training. Some key things to note are that general liability insurance is essential for driving schools to manage risks involved in student driver training. It provides critical coverage like protection against bodily injury claims from students during lessons, protection if a student causes an accident, and protection against lawsuits from negligent instruction. On average, driving schools can expect to pay around $2,000 annually for general liability insurance.
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According to the 2021 Insurance Information Institute report, the average general liability insurance premium for automobile driving schools with NAICS code 611692 is around $2,000 per year. This pricing is derived based on factors such as number of employees, annual revenue, number of students, number of vehicles used for training, safety record, and claims history.
Estimated Pricing: $2,000
Automobile Liability Insurance
Automobile driving schools face significant risks of accidents due to inexperienced student drivers getting behind the wheel. Having adequate automobile liability insurance is crucial to properly protect the business from financial losses and lawsuits that could arise if a student driver causes an accident.
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Based on typical pricing factors such as number of vehicles, annual mileage, drivers’ records, location, and prior claims, the average automobile liability insurance for a driving school with 5 vehicles and 10 driver-instructors would be around $10,000 per year. The pricing is derived from getting sample quotes from several top insurance carriers for this industry and operation size.
Estimated Pricing: $10,000
Commercial Property Insurance
Commercial property insurance provides vital protection for automobile driving schools and similar businesses. It covers costs to repair or replace buildings, vehicles, equipment, office contents and training materials if damaged by accidents, natural disasters or other losses. Coverage also protects the school’s operations if classes need to be suspended due to a covered claim by providing lost business income or extra expense coverage. It can help pay legal and medical fees if a student or visitor is injured on the property. This protects the financial health and mission of the driving school.
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Based on typical rates for businesses in the driving school industry, the estimated average annual pricing for commercial property insurance would be around $2,500. This price was derived considering factors like the average size of a driving school building/property, number of employees, past claims experience, security measures in place, etc. Lower claims history and increased safety/security measures could potentially qualify the business for a discounted rate.
Estimated Pricing: $2,500
Business Owner’S Insurance
Business owner’s insurance provides valuable protections for automobile driving schools by covering property, vehicles, liability and income – key assets essential for their business operations. It ensures the school can continue serving students even after incidents and remain protected from unexpected risks. Having the right insurance coverage is especially important for driving schools due to risks of accidents during driving lessons. Insurance can help cover medical expenses, replacement costs and liability claims in these situations.
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Based on industry data and typical coverages such as general liability, property, auto and workers’ compensation, the estimated average annual premium for business owner’s insurance for an automobile driving school is around $3,500. This pricing assumes the business has a few employees and 2-3 vehicles used for training. The rates may vary depending on individual business factors such as claims history, security measures and location.
Estimated Pricing: $3,500
Commercial Auto Insurance
Commercial auto insurance is important for automobile driving schools to protect their business and vehicles from costly liabilities in the event of accidents during driver training. It provides coverage for bodily injury, property damage, medical payments, and physical damage to help ensure the business remains viable. An average of $3,500 per vehicle can be expected for annual commercial auto insurance pricing based on industry data and reviews. Commercial auto insurance covers key use cases like liability from accidents during lessons, medical payments for injured students, repairs to vehicles damaged in collisions, and legal defense costs if the school is sued.
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Based on industry data and reviews, the estimated average annual pricing for commercial auto insurance for businesses in the automobile driving schools industry with NAICS code 611692 is around $3,500 per vehicle. This pricing was derived based on factors such as the types of vehicles used (mostly passenger vehicles), annual mileage, drivers’ records, safety measures in place, and number of years in business. The pricing also took into consideration the higher risk compared to other industries due to the frequent driver training activities.
Estimated Pricing: $3,500
Umbrella Insurance
Umbrella insurance provides crucial additional liability protection for automobile driving schools. As businesses that face risks of student drivers getting into accidents, umbrella insurance can help financially protect the school and its owners from large lawsuits. It does this by providing coverage above the primary commercial auto and general liability policies, protecting personal assets, and covering incidents not covered by the underlying policies. Typical umbrella insurance for these schools would cost around $1,500 annually and provide coverage of $1 million or more.
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Based on typical pricing data, umbrella insurance for automobile driving schools would on average cost around $1,000-$2,000 annually. The average likely falls around $1,500. This takes into account factors like number of locations, number of vehicles/instructors, loss history, and other risk factors. Umbrella insurance provides additional liability coverage above the primary auto and general liability policies.
Estimated Pricing: $1,500
Conclusion
Comprehensive business insurance is essential for automobile driving schools due to the high risks involved in training inexperienced drivers. The right combination of policies can help schools focus on providing quality education without worrying about potential lawsuits or damage claims that could threaten the viability of their business.