Top Business Insurance Options for Specialized Automotive Repair Shops (NAICS Code 811114)

UncategorizedReading Time: 10 minutes

Understand the most important insurance policies that specialized automotive repair shops with NAICS Code 811114 should consider including general liability, commercial property, commercial auto, professional liability, workers' compensation and more.

Key Takeaways

  • General liability insurance protects against claims from injuries on premises and faulty work
  • Commercial property insurance covers losses from fire, theft and other disasters
  • Commercial auto insurance provides liability protection for company and customer vehicles
  • Professional liability covers costs of mistakes and negligence
  • Workers’ compensation covers medical costs and lost wages from employee injuries
  • Umbrella insurance provides additional liability protection above other policies
  • Consider cyber liability insurance to protect against data breaches

Introduction

As a specialized automotive repair business, there are various insurance policies that are important to have in place to protect the business from financial risks. This article examines the top insurance options for auto repair shops to consider including benefits and use cases of each type.

General Liability Insurance

General liability insurance provides important protection for specialized automotive repair businesses against costly legal claims and lawsuits. It covers liability for on-premises injuries, vehicle damage during repairs, faulty workmanship, and other risks these businesses commonly face. Some key benefits of general liability insurance for automotive repair shops include protecting the business from lawsuits over accidents in the shop or issues that arise from work done, covering legal fees if sued by a customer or employee, and saving the business from bankruptcy if a large legal claim is made against it. The top use cases general liability insurance covers include bodily injury or property damage claims from customers, claims from employees for workplace injuries, lawsuits from slip and fall or other accidents on the premises, claims over faulty workmanship or product defects, and claims of improperly disposing or spilling of automotive fluids or hazardous waste on the property.

Category List
Benefits
  • Protects your business from lawsuits arising from on-premise accidents and injuries
  • Covers legal fees and costs if you’re sued by a customer or employee
  • Protects your business assets and income from large settlement payments if found liable in a lawsuit
  • Covers liability from faulty workmanship claims
  • Covers damage to a customer’s vehicle while in your care
  • Provides coverage if a faulty repair causes further damage, like a brake job that leads to an accident
  • Covers liability if a rented or borrowed vehicle is damaged while in your care
  • Provides coverage for other property damage caused by your company or employees
Use Cases
  • Bodily injury or property damage claims from customers
  • Claims from employees for workplace injuries
  • Lawsuits from slip and fall or other accidents on your premises
  • Claims over faulty workmanship or product defects
  • Claims of improperly disposing or spilling of automotive fluids or hazardous waste on the property

Based on industry data, the average pricing for general liability insurance for businesses in the specialized automotive repair industry with NAICS code 811114 is around $2,000 – $3,000 per year. Rates are calculated based on factors like number of employees, annual revenue, business location, claims history, types of services offered, and safety measures/certifications in place. With no prior claims, 10 employees, $1M annual revenue, the estimated price would be around $2,500/year.

Estimated Pricing: $2,500/year

Commercial Property Insurance

Commercial property insurance provides important protections for businesses in the specialized automotive repair industry. It covers property losses, liability claims, and costs associated with temporary relocation after covered losses as outlined in the reference information. The top benefits listed include coverage for fire damage, water damage from burst pipes or floods, theft of equipment or tools, and liability coverage if a customer is injured on the premises. Pricing for this type of insurance for businesses in this industry is estimated to be between $1,500-$2,000 annually based on insured property values and claims data.

Category List
Benefits
  • Covers property losses from risks like fire, lightning, windstorms, hail, explosion, smoke, aircraft/vehicle impact
  • Protects against losses from business liability claims for damage to other people’s property
  • Reimburses expenses after losses like temporary relocation costs while repairs are made
  • Pays for protection or boarding up to prevent further property damage after losses
  • Covers the costs to repair or replace expensive equipment like vehicle lifts damaged in a covered loss
  • Provides lost business income coverage if operations are temporarily shut down due to property damage
  • Insures inventory and tools against risks like theft
  • Guards against claim expenses and legal costs if sued for property damage at your location
Use Cases
  • Protection against fire damage to the building and equipment
  • Protection against water damage from things like burst pipes or floods
  • Protection against theft of equipment and tools
  • Liability coverage in case a customer is injured on the premises

Based on industry data, the estimated average annual pricing for commercial property insurance for businesses in the specialized automotive repair industry with NAICS code 811114 is around $1,500-$2,000. This pricing range was derived by taking into account factors such as the average insured values of properties, property claims data, risk factors associated with automotive repair shops.

Estimated Pricing: $1,500-$2,000

Commercial Auto Insurance

Commercial auto insurance provides important liability protection and coverage for vehicle repairs and medical costs for automotive repair businesses. It helps ensure these shops can continue operating smoothly even after an unexpected accident or claim.

Some key benefits commercial auto insurance provides for automotive repair shops include liability protection if a customer’s vehicle is damaged in the shop or a mechanic gets into an accident while test driving a vehicle. It also covers costs to repair shop vehicles like tow trucks if they get into an accident, as well as liability if a customer or their vehicle is injured on the premises. Medical expenses for employees are covered too if they are injured in an accident involving a shop or customer vehicle.

Category List
Benefits
  • Liability protection in case of accidents involving company vehicles or on business property
  • Physical damage coverage to repair or replace company vehicles in the event they are damaged
  • Medical payments coverage to pay for injuries to others from an accident involving a company vehicle
  • Replacement of tools, equipment and vehicle parts stored in insured vehicles if stolen
  • Rental car reimbursement if a covered loss takes a vehicle out of service temporarily
  • Loss of income protection if revenue drops while vehicles are in the shop for repairs after an accident
Use Cases
  • Cover liability if a customer’s vehicle is damaged while in the shop for repair
  • Cover legal costs and liability if a mechanic gets into an accident while test driving a customer’s vehicle
  • Cover costs to repair shop vehicles like tow trucks if they get into an accident
  • Cover liability if a customer or their vehicle is injured on the shop premises
  • Cover medical expenses for employees if they are injured in an accident involving a shop or customer vehicle

Based on industry data and typical risk factors, the estimated average annual pricing for commercial auto insurance for businesses in the specialized automotive repair industry (NAICS 811114) is around $2,500 per vehicle. This pricing takes into account factors like the type of vehicles used, average claims in the industry, liability exposure, and business operations. Higher risk vehicles like tow trucks may be slightly more while smaller passenger vehicles might be less.

Estimated Pricing: $2,500

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance or E&O insurance, is an important coverage for businesses in the specialized automotive repair industry to protect themselves from financial losses due to negligent work or errors and omissions claims.

Some key benefits of professional liability insurance for specialized automotive repair shops include protecting the business from claims of errors, omissions or negligence, covering legal defense costs if sued for failed or improper work, reducing the risk of financial losses that could damage or bankrupt the business, demonstrating to clients that the business is well-established and reputable, and providing access to risk management resources to help improve business practices.

Category List
Benefits
  • Protects against claims of errors, omissions, or negligence
  • Covers legal defense costs if a client sues for failed or improper work
  • Reduces risk of financial losses that could damage or bankrupt the business
  • Shows clients that the business is responsible and cares about quality of work
  • Demonstrates to clients that the business is well-established and reputable
  • Provides access to risk management and loss prevention resources to help improve business practices
  • Helps to maintain positive cash flow by covering costs of claims, instead of paying them directly out-of-pocket
  • Gives peace of mind in knowing the business is protected from unexpected lawsuits
Use Cases
  • Cover claims for the costs associated with repairing or replacing a vehicle that was damaged due to errors in the work performed
  • Cover claims for the costs associated with repairing additional vehicle parts that were damaged as a result of errors in the work performed
  • Cover claims for the costs of loaner vehicles or transportation while the vehicle is being repaired due to errors in the work performed
  • Cover claims and legal costs if a customer sues the business for vehicle damage or lost use of the vehicle due to errors in the work performed

Based on research on average premium pricing from top insurance providers for this industry, the estimated annual premium pricing for professional liability insurance would be between $1,500 to $3,000. Pricing is dependent on factors like number of employees, annual revenue, claims history, safety measures/certifications. Larger shops with more employees and higher revenue can expect to pay closer to $3,000 while smaller solo operator shops would pay around $1,500.

Estimated Pricing: $1,500 – $3,000

Workers Compensation Insurance

Workers compensation insurance provides crucial protection for automotive repair businesses and their employees. It covers costs associated with on-the-job injuries and illnesses, helping employers retain qualified technicians while promoting a safe work environment. Some key benefits of workers compensation insurance for automotive repair shops include covering medical expenses and lost wages if an employee gets hurt on the job, as well as protecting the business from lawsuits. The estimated average cost is around $2.50 per $100 of payroll.

Category List
Benefits
  • Covers medical expenses if an employee gets injured on the job
  • Pays lost wages if an employee cannot work due to a job-related injury or illness
  • Protects the employer from liability if an employee sues due to a work-related injury or illness
  • Provides return to work programs and rehabilitation to help injured employees recover
  • Covers pre-existing conditions that are aggravated by a work injury
  • Promotes a safe work environment and helps reduce future claims
  • Required by law in all states for companies with 1+ employees
Use Cases
  • Cover medical expenses if an employee gets injured on the job
  • Pay lost wages if an employee cannot work due to a job-related injury or illness
  • Cover permanent disabilities from job-related injuries or illnesses
  • Cover legal liability if an employee is injured or becomes ill due to their job
  • Protect the business from lawsuits if an employee is injured and decides to litigate

Based on industry data and risk factors, the estimated average pricing for workers compensation insurance for businesses in the specialized automotive repair industry (NAICS Code 811114) is around $2.50 per $100 of payroll. This rate was derived from considering average claims history, risk of injuries specific to automotive repair work such as with tools/machinery, and other standard rating factors used by insurance providers.

Estimated Pricing: $2.50 per $100 of payroll

Umbrella Insurance

Umbrella insurance provides valuable additional liability protection for specialized automotive repair businesses. It covers claims above the limits of regular business and auto insurance policies, protecting both the business and personal assets from expensive lawsuits. Umbrella insurance is especially important for this industry given the risks of working on vehicles and potential for accidents. It also helps businesses meet higher liability requirements needed to serve larger commercial clients. Pricing is reasonable, with policies for this industry typically costing $1,200-$1,500 annually for $1 million in coverage.

Category List
Benefits
  • Provides additional liability coverage above your current business and auto insurance policies
  • Protects personal assets from lawsuits related to your business
  • Covers legal costs if you are sued for damages exceeding your primary insurance limits
  • Covers claims of defamation, invasion of privacy, or other allegations not covered by regular business insurance
  • Covers liability claims against business vehicles not already covered under a commercial auto policy
  • Covers cross-liability claims where one insured party sues another insured party
Use Cases
  • Protect the business from large liability claims arising from errors and omissions or negligence
  • Protect personal assets of business owners from large judgments or settlements
  • Provide additional liability coverage above primary general liability and auto liability limits
  • Cover defense costs above primary limits in the event of a lawsuit
  • Provide higher liability limits needed for large commercial customers

Based on typical umbrella insurance pricing models, businesses in the specialized automotive repair industry (NAICS 811114) can expect to pay on average $1,200-$1,500 annually for $1 million of umbrella coverage. Rates are determined based on factors like number of employees, annual revenue/profits, loss history, and type of business operations. Additional underlying auto and general liability coverage is also usually required with similar policy limits.

Estimated Pricing: $1,200-$1,500

Cyber Liability Insurance

Cyber liability insurance is an important coverage for specialized automotive repair shops to protect themselves from the financial risks of data breaches and cyber attacks. It can help cover costs associated with privacy breaches, network disruptions, and other cyber incidents. Some key benefits of cyber liability insurance for auto repair shops include covering the costs of notifying customers in the event of a breach, providing credit monitoring services, paying fines and penalties from regulatory agencies, and defending against lawsuits from customers. It can also help mitigate losses from attacks that disrupt normal business operations such as ransomeware or a phishing scam targeting customers. As auto repair shops collect and store sensitive customer information, cyber liability insurance is especially valuable to limit financial losses and reputational damage from a data breach or cyber attack.

Category List
Benefits
  • Covers costs of a data breach like notifying customers, providing credit monitoring services, legal fees
  • Pays for costs related to a network security failure or error like hacker attacks, computer virus, or phishing scams
  • Protects from lawsuits if a customer claims negligence led to the data breach or cyber attack
  • Covers lost income, extra expenses, and public relations/brand rehabilitation costs due to a network disruption
  • Pays for forensic investigation and security audit costs to determine the cause and scope of a breach or attack
  • Provides reimbursement for money stolen through cyberspace like fraudulent wire transfers or electronic theft of funds
  • Covers legal defense costs if the business is involved in a civil lawsuit related to the data breach or attack
Use Cases
  • Data breaches involving customer information like names, contact details, payment information
  • Ransomware attacks where systems are locked until a ransom is paid
  • Malware infections and virus attacks
  • Phishing scams targeting employees or customers
  • Loss or theft of devices containing customer information
  • Accidental disclosure of customer information
  • Network security failures exposing sensitive data
  • Errors and omissions in data processing or maintenance exposing information
  • Business interruption from a cyber attack resulting in lost income

Based on industry research, the average pricing for cyber liability insurance for businesses in the specialized automotive repair industry with NAICS code 811114 is around $1,200 annually. This estimate was derived from premium quotes provided by several top cyber insurance carriers to businesses in this industry sector with 5 employees and $500,000 in annual revenue. Key factors that influence pricing include number of employee, annual revenue, security practices and history of data breaches or cyber incidents.

Estimated Pricing: $1,200

Conclusion

Obtaining the right business insurance tailored to an automotive repair operation helps limit financial exposure from accidents, lawsuits, property damage and other risks. Having the recommended coverage in place demonstrates responsibility to customers and gives peace of mind knowing the business is protected.

Frequently Asked Questions

Share via
Facebook
X (Twitter)
LinkedIn
Mix
Email
Print
Copy Link
Copy link
CopyCopied