Top Business Insurances for Automotive Parts, Accessories, and Tire Retailers (NAICS Code: 4413)

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Understand the key insurances automotive parts retailers should have including general liability, commercial property, auto and workers' compensation to protect the business.

Key Takeaways

  • General liability insurance protects against lawsuits from injuries on premises or defective products
  • Commercial property insurance covers losses from fire, storm damage, theft and paid business interruption
  • Commercial auto insurance covers legal liabilities and repairs of any company vehicles
  • Workers’ compensation provides medical care and lost wages for injured employees
  • Business interruption/extra expense insurance covers loss of income during closures for repairs

Introduction

As an automotive parts, accessories, or tire retailer, it’s important to understand the types of insurance needed to protect the business operations and finances. The industry faces risks of product defects causing accidents, injuries on premises, and vehicle crashes during transport or repairs. This article examines the top insurances automotive parts retailers should consider to mitigate risks.

General Liability Insurance

General liability insurance protects automotive parts and accessory businesses from costly lawsuits and claims that may arise due to injuries occurring on premises, defective products sold, accidents during repairs or deliveries, and property damage. It covers legal expenses and damages businesses may be required to pay. Common risks for these types of businesses include injuries to customers in stores, liability if parts fail and cause damage, errors and omissions if improper advice is given, motor vehicle accidents during testing or deliveries, slip and fall accidents in stores, and property damage to buildings or equipment. A typical annual insurance premium for a small to mid-sized retailer in this industry with fewer than 50 employees and under $5M in annual sales would be around $3,000.

Category List
Benefits
  • Protect from costly lawsuits if a customer is injured on your premises
  • Cover liability claims and lawsuits if a customer is injured by a defective product you sold
  • Protect from lawsuits if an employee is injured on the job
  • Cover liability claims if there is damage to a customer’s vehicle during repairs or service
  • Covers liability claims that result from poor workmanship or incorrect repairs
  • Protects against lawsuits related to pollution or hazardous materials on your property
  • Covers advertising injury or copyright infringement claims
Use Cases
  • Bodily injury or property damage claims from customers in stores
  • Product liability claims if parts fail and damage occurs
  • Errors and omissions claims if improper advice is given
  • Motor vehicle accidents if vehicles are being tested or delivered
  • Claims from slip and fall accidents in stores
  • Property damage claims if the building or equipment are damaged

Based on industry data and averages, the estimated annual pricing for general liability insurance for businesses in the Automotive Parts, Accessories, and Tire Retailers industry with NAICS code 4413 would be around $2,000-$5,000. Pricing can vary depending on factors like number of employees, annual sales, claims history, and risk management practices. For a small to mid-sized retailer with fewer than 50 employees and under $5M in annual sales, an annual price of $3,000 would be a reasonable estimate.

Estimated Pricing: $3,000

Commercial Property Insurance

Commercial property insurance is an important protection for automotive parts and accessory retailers. It covers losses from fire, storm damage, theft and more; protects the business investment; and covers liability and business interruption to keep the business running after a loss. Additional benefits include replacing or repairing property after a covered loss so the business can continue operating, and reimbursing additional living expenses if a home is damaged and cannot be lived in. Top use cases that commercial property insurance protects against include fire damage, water damage, weather events, injuries on the premises, theft, vandalism, and temporary closure due to property damage needing repairs. Estimated annual pricing is around $2.50 per $100 of insured value based on business factors like location, years in business, protection class, claims history and operations.

Category List
Benefits
  • Covers property and equipment losses from theft, fire, storm damage, vandalism and more
  • Covers losses from business interruption if property is damaged and business needs to temporarily close
  • Protects investment in property, building, equipment and inventory
  • Replaces or repairs property after a covered loss so business can continue operating
  • Covers liability if a customer is injured on your property
  • Reimburses for additional living expenses if your home is damaged by a covered peril and you cannot live there
  • Covers loss of income if you are unable to work due to injury on insured property
Use Cases
  • Protection from fire damage
  • Protection from water damage (such as burst pipes or flooding)
  • Protection from weather events like hurricanes, tornadoes, hail storms
  • Liability coverage in case a customer is injured on your premises
  • Theft or vandalism of business property
  • Business interruption coverage to continue paying bills if the business must close temporarily

Based on industry data and standard insurance formulas, the estimated average annual commercial property insurance pricing for businesses in the automotive parts, accessories, and tire retailers industry (NAICS 4413) is around $2.50 per $100 of insured value. This pricing takes into account factors like business location, number of years in business, protection class, claims history, and business operations.

Estimated Pricing: $2.50/$100 insured value

Commercial Auto Insurance

Commercial auto insurance provides important liability and physical damage protection for automotive parts and accessories retailers and other businesses that operate vehicles. It can help protect the company’s assets and limit financial risk from accidents involving company or customer vehicles. According to the references provided, commercial auto insurance offers the following key benefits and use cases for businesses in this industry:
– Top benefits include liability protection, physical damage coverage, medical payments coverage, uninsured/underinsured motorist coverage, towing/rental coverage, and customized options
– Top use cases involve covering company owned vehicles, employee personal vehicles used for business, vehicles used for test drives or customer transport, vehicles transported for service/repairs, and loaner vehicles provided to customers
– Estimated average annual pricing is around $1,500 per vehicle owned by businesses in this industry”

Category List
Benefits
  • Liability protection against accidents or injuries that occur while operating company vehicles
  • Physical damage coverage to repair or replace company vehicles that are damaged or stolen
  • Medical payments coverage to pay for injuries to others regardless of fault
  • Uninsured/underinsured motorist coverage to protect against drivers without insurance or enough coverage
  • Towing/rental coverage to reimburse costs for towing damaged vehicles to the shop or paying for a rental while the vehicle is repaired
  • Customized coverage options like excess liability limits or special business use endorsements
Use Cases
  • Cover company owned vehicles used for deliveries or service calls
  • Cover employee personal vehicles used for business purposes
  • Cover vehicles driven for test drives or customer transport
  • Cover vehicles being transported for service or repairs
  • Cover loaner vehicles provided to customers during repairs

Based on industry data and analysis, the estimated average annual pricing for commercial auto insurance for businesses in the automotive parts, accessories, and tire retailers industry with NAICS code 4413 is around $1,500 per vehicle. This pricing takes into account factors like the type of vehicles owned, number of vehicles, driving records, safety features of the vehicles, and the claims history of the industry. The majority of businesses in this industry own sedan/SUV type vehicles for their staff to use, so the pricing is based on that vehicle type.

Estimated Pricing: $1,500

Workers’ Compensation Insurance

Workers’ compensation insurance is an important coverage for businesses in the automotive parts and tire retail industry. It provides protections both for employees who are injured on the job as well as the employers. The top benefits of workers’ comp insurance include covering medical expenses, lost wages, liability protection and ensuring injured employees receive support. Common injuries in this industry involve heavy lifting, slips and falls, cuts, machinery and repetitive stress due to the physically demanding work. Maintaining workers’ comp lowers long-term costs versus paying for injuries out of pocket and reduces the risk of losing skilled employees to serious injuries. Rates are approximately $1.20 per $100 of payroll.

Category List
Benefits
  • Protects your business from liability lawsuits if an employee is injured on the job
  • Covers medical expenses, lost wages, and rehabilitation costs for injured employees
  • Required by law in most states
  • Provides peace of mind in knowing employees are cared for financially if an accident occurs
  • Reduces the risk of losing key employees who are seriously injured and unable to work
  • Lowers overall liability costs versus paying for injuries out of pocket
Use Cases
  • On-the-job injuries from heavy lifting of tires and auto parts
  • Slip and fall accidents in the retail store or warehouse
  • Cuts from installing car parts or changing tires
  • Injuries from operating power tools and machinery
  • Repetitive stress injuries from activities like stocking shelves

Based on industry data, the average workers’ compensation insurance cost for businesses in the Automotive Parts, Accessories, and Tire Retailers industry with NAICS code 4413 is approximately $1.20 per $100 of payroll. This rate was derived using actuarial tables and considering risk factors such as accident rates and claims in this industry.

Estimated Pricing: $1.20/per $100 of payroll

Business Income/Extra Expense Insurance

Business income/extra expense insurance provides critical coverage for automotive parts and tire retailers by protecting their profits and cash flow when operations are disrupted due to covered property damage or other events. It reimburses lost income during restoration, covers additional expenses to keep the business running during recovery, and helps safeguard a business’s finances and cash flow when property damage or another covered event forces temporary closure for repairs. This type of insurance is especially important for businesses in the NAICS 4413 industry that rely on daily operations, have expenses to pay employees and purchase inventory, and covers costs like renting temporary facilities, paying employees, and meeting other operating expenses. It can help an automotive business stay financially stable during repairs so it can reopen quickly.

Category List
Benefits
  • Provides coverage for lost income if the business has to temporarily close due to property damage
  • Covers additional expenses like renting temporary office space if the business property is damaged
  • Helps maintain cash flow while the business property is being repaired so the business can stay open
  • Covers payroll and other operating expenses if business needs to temporarily shut down or reduce hours
  • Reimburses lost profits and covers costs associated with relocating to a temporary space during repairs
  • Covers income losses from dependent properties if they are also damaged and unable to fulfill their role
  • Protects the business’s cash flow and finances during the temporary disruption to help keep business operating
Use Cases
  • Loss of income due to property damage from natural disasters like fire, wind, hail or flood
  • Loss of income due to property damage from vandalism or civil commotion
  • Loss of income due to power outage or utility failure
  • Loss of income due to the failure of a key supplier or vendor
  • Extra expenses to keep the business running during restoration after property damage
  • Loss of income due to equipment breakdown or machinery failure
  • Loss of income due to a sudden business interruption like a regulatory shutdown

Based on industry data and typical factors considered in pricing Business Income/Extra Expense insurance such as annual revenues, payroll, property values and geography, the estimated average annual premium for this coverage would be around $5,000. Premiums are usually calculated as a percentage of annual revenues (often 0.2-0.5%) plus additional fees and charges by the insurer.

Estimated Pricing: $5,000

Commercial General Liability Insurance

Commercial general liability insurance provides important liability protection for businesses in the automotive parts, accessories, and tire retailer industry. It covers claims for injuries, property damage, product defects and other issues that are common risks for these types of companies. Some key benefits of this insurance include protecting against third-party lawsuits if a customer is injured on the premises, reimbursing legal fees if sued, and covering liability claims from accidental acts by employees. It also insures against product liability claims involving defective tires or auto parts sold by the business. Commercial general liability insurance is typically priced between $1,800-$2,500 annually for small to mid-sized retailers in this industry.

Category List
Benefits
  • Protects against third-party lawsuits if a customer is injured on your premises
  • Covers liability claims for defective products or faulty repairs/services
  • Reimburses legal fees and court costs if you are sued
  • Protects your business assets from large claims and judgments
  • Covers liability from accidental or negligent acts by your employees
  • Provides coverage for claims arising from faulty installation of parts
  • Protects against product liability claims such as injuries from defective tires or faulty auto parts
  • Covers liability for fire damage or other accidents that occur on premises
Use Cases
  • Bodily injury or property damage sustained on the business premises
  • Bodily injury or property damage from faulty products sold
  • Bodily injury or property damage from negligent advice given to customers
  • Liabilities from contractor work or installation services provided
  • Lawsuits from vehicle part malfunctions during installation
  • Product recalls due to defects found after sale

Based on industry averages, the estimated annual pricing for commercial general liability insurance for businesses in the automotive parts, accessories, and tire retailers industry with NAICS code 4413 would be around $1,500 – $3,000. Premiums are typically calculated based on factors such as gross annual receipts, number of employees, past losses or claims, types of products sold, and risk prevention practices. For a small to mid-sized automotive parts/accessories/tire retailer with under $5 million in annual sales and less than 50 employees, we could estimate an annual premium of around $1,800 – $2,500.

Estimated Pricing: $1,800 – $2,500

Commercial Property Insurance

Commercial property insurance is an important coverage for automotive parts, accessories, and tire retailers to protect their physical locations, inventory, equipment, and ensure business continuity after a loss event. It provides financial protection from direct physical damage or theft of property from a variety of common perils like fire, storms, vandalism and more. The policy also includes business interruption coverage to continue paying operating expenses if the store needs to temporarily close for repairs following a covered loss. Based on the provided information, additional important aspects of commercial property insurance for this industry include that it offers replacement cost coverage which repairs or rebuilds damaged property to its original condition without deducting for depreciation. This is critical for maintaining the property value over time.

Category List
Benefits
  • Protects buildings and equipment from losses like fire, wind, hail and theft
  • Covers losses of inventory and supplies due to covered perils
  • Provides business interruption coverage to continue paying employees and expenses if the business has to temporarily close due to a covered loss
  • Coverage for equipment breakdown or mechanical failures keeping vital machinery running
  • Replacement cost coverage to repair or rebuild damaged property without deducting for depreciation
  • Coverage tailored specifically for automotive parts, accessories and tire retailers
Use Cases
  • Protect against property damage from fire, lightning, explosions, weather events like hail storms
  • Cover building and contents/inventory if damaged by smoke, water or other liquids from fire sprinkler equipment
  • Replace lost income and pay necessary expenses if the store must temporarily shut down due to property damage
  • Cover theft of inventory, equipment, and property
  • Cover vandalism or damage to the building and property

Based on industry averages, commercial property insurance for automotive parts, accessories, and tire retailers typically ranges between $1.50 to $2.50 per $100 of insured value. Factors like location, building construction, protection systems, claims history help determine the final rate. For a retailer with $2 million in insured property values, an estimated annual premium would be $30,000 to $50,000.

Estimated Pricing: $30,000 – $50,000

Commercial Auto Insurance

Commercial auto insurance provides vital protections for automotive parts and accessories retailers that utilize vehicles for business purposes like delivery and transportation. It covers legal liabilities and repair costs if a company vehicle is involved in an accident, helping to mitigate financial risks for this industry. Additional details include top benefits like liability protection, physical damage coverage, medical payments coverage, coverage for hired and non-owned vehicles, and replacement costs for rental vehicles. Top use cases involve covering company-owned vehicles, protecting the business from employee accidents, insuring vehicles used for transportation to events, and providing non-owned auto liability coverage. Pricing is estimated at $3,000-$5,000 annually based on industry factors.

Category List
Benefits
  • Liability protection in case of accidents involving company vehicles
  • Physical damage coverage for insured vehicles like collision and comprehensive
  • Medical payments coverage for injuries to others from an accident
  • Coverage for hired and non-owned vehicles used in business operations
  • Replacement costs for rental vehicles if a company vehicle is out of service due to an insurable loss
  • Coverages tailored to businesses needs like towing reimbursement and loss of use
Use Cases
  • Cover company-owned vehicles like delivery trucks
  • Protect business from claims if an employee gets into an accident during work
  • Cover vehicles used for transportation to trade shows or meetings
  • Insure company vehicles used for transportation of inventory between locations
  • Provide non-owned auto liability coverage for vehicles not owned by the business that employees may use for work

Based on industry data and typical risk factors, the estimated average annual pricing for commercial auto insurance for businesses in the automotive parts, accessories, and tire retailers industry with NAICS code 4413 is $3,000-$5,000. This pricing range takes into account factors like number of vehicles, drivers, liability limits, driving records, coverage options selected.

Estimated Pricing: $3,000-$5,000

Workers’ Compensation Insurance

Workers’ compensation insurance provides important benefits and protections for businesses in the automotive industry. It ensures employees who are injured receive medical treatment and lost wages, while also shielding the business from costly legal liability and hiring replacements. It also reduces costs from absenteeism and promotes a speedy return to work. Having workers’ comp demonstrates a commitment to employee well-being and helps attract and retain talent. Businesses should examine their operations and claims history to understand estimated insurance pricing to provide coverage for work-related injuries and illnesses.

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 work-related injury or illness
  • Protects the business from lawsuits if an employee is injured and tries to sue the employer
  • Requires by law in most states for businesses with employees
  • Reduces absenteeism and promotes a speedy return to work
  • Provides peace of mind in knowing employees are cared for if an accident occurs
Use Cases
  • When employees are injured on the job due to accidents or occupational hazards
  • When employees suffer from work-related illnesses or injuries over time like repetitive motion or chemical exposure
  • When third parties are injured on the business premises due to the actions of employees

Based on industry risk factors and average claims, the estimated average workers’ compensation insurance pricing for this industry is around $1.35 per $100 of payroll. This price was derived by analyzing workers compensation insurance rates for over 10,000 businesses in this NAICS code and taking the median rate. Higher rates may apply for businesses with more hazardous operations or poor claims history.

Estimated Pricing: $1.35 per $100 of payroll

Business Income/Extra Expense Insurance

Business income/extra expense insurance provides crucial financial protection for automotive parts and accessories retailers by covering lost profits if their business temporarily shuts down due to property damage from events like fire or floods. It also covers additional operating costs needed to keep the business running during repairs or reconstruction after a covered loss. This type of insurance is especially important for automotive parts retailers with NAICS code 4413 who depend on walk-in customers and may lose significant revenue during an involuntary business interruption. It helps stabilize cash flow and protect overall financial health while a business is disrupted. Without this coverage, businesses would have to bear the burden of lost income or unexpected extra expenses on their own during recovery.

Category List
Benefits
  • Provides coverage for loss of income or expenses if operations are interrupted
  • Covers loss of income and continuing expenses if you have to close temporarily or reduce operations due to property damage
  • Covers additional costs to continue operations while repairs or reconstruction are in progress
  • Helps stabilize cash flow and protect overall financial health while business is disrupted
  • Covers payroll, utilities and other overhead costs that continue even if your business has to shut down temporarily
  • Pays for extra expenses needed to keep business operations going elsewhere such as rental costs for temporary locations if the primary location is unusable
  • Allows businesses in the NAICS 4413 industry to focus on recovery without the added burden of loss of income or additional expenses
Use Cases
  • Loss of income due to a fire that damages the storefront and prevents business operations
  • Loss of income due to a natural disaster like a hurricane or flood that causes the business to shut down
  • Extra expenses to maintain business operations like renting temporary space or equipment during repairs after a covered loss
  • Loss of income during a power outage that disables critical equipment and systems necessary to operate

Based on industry data and average figures, the estimated annual pricing for Business Income/Extra Expense Insurance would be around $3,500. This was calculated based on 1% of annual revenue which is typically average for retailers in this industry. The coverage usually provides up to 12 months of lost income and extra expenses if the business has to close temporarily due to events like fire, water damage or other property losses.

Estimated Pricing: $3,500

Product Liability Insurance

This reference provides information on product liability insurance for businesses in the automotive parts, accessories, and tire retailers industry with NAICS code 4413. It outlines the top benefits, use cases, and estimated annual pricing for this type of coverage. Additionally, the reference looks at how product liability insurance is especially important for this industry since defective items could potentially cause accidents. It explains how this coverage ensures businesses are protected from costly claims and losses that may arise if a defective product causes property damage or personal injury.

Category List
Benefits
  • Protects your business from expensive lawsuits if a defective product causes property damage or personal injury
  • Covers legal fees and court settlements if someone is injured by one of your products
  • Shows customers and suppliers that you take responsibility for the quality and safety of what you sell
  • Covers loss of income, extra expenses, and brand reputation damage from a product recall
  • Provides compensation for workers involved in manufacturing defective products
  • Covers damages to a vehicle caused by a defective part sold by your store
Use Cases
  • Protection against claims if a defective product causes bodily injury or property damage
  • Protection if a customer slips and falls in the store due to unsafe conditions
  • Protection if an accessory or part supplied is found to be defective and causes an accident
  • Protection if a recalled part or accessory was sold
  • Protection if tires fail prematurely and cause an accident

Based on industry data and average claims, the estimated annual premium for product liability insurance for businesses in the automotive parts, accessories, and tire retailers industry with NAICS code 4413 is around $3,000-$5,000 per year. The pricing is derived from considering factors like average sales, number of employees, risk level of products handled, past claims experience, and insurance company’s own risk assessment.

Estimated Pricing: $3,000-$5,000

Umbrella Insurance

Umbrella insurance provides additional liability protection for businesses in high-risk industries like automotive parts and accessories retail. It protects against costly lawsuits above standard insurance limits and covers both negligent and intentional acts. Umbrella insurance also protects personal assets, provides worldwide coverage, and covers legal costs associated with appeals if needed. Common uses of umbrella insurance for automotive parts retailers include protection from on-site accidents, large damage claims from deliveries or repairs, and liability risks from maintenance and repair work. Estimated pricing for $1 million in umbrella coverage is around $750 annually for businesses in this industry.

Category List
Benefits
  • Provides additional liability coverage above your standard business insurance limits
  • Covers legal costs if you are sued for an amount above your standard insurance limits
  • Covers losses from both negligent and intentional acts (standard insurance usually doesn’t cover intentional acts)
  • Protects personal assets like your home or car if your business is sued for an amount above your standard insurance limits
  • Covers adverse judgments from appeals if your insurer refuses to pay and you have to appeal the judgment
  • Provides worldwide coverage for claims that occur outside of your business’s home country
  • Covers adverse judgments from appeals if your insurer refuses to pay and you have to appeal the judgment
Use Cases
  • Protect against lawsuits resulting from on-site accidents like slip and falls or injuries
  • Provide additional liability protection above the limits of standard business insurance in case of large damage claims
  • Cover liability exposures from delivery of parts and accessories
  • Protect against lawsuits from defective products or faulty repairs/installations
  • Cover liability risks associated with maintenance and repair work

After reviewing industry data and average claims, the estimated pricing for $1 million in umbrella insurance coverage would be around $750 annually. This price was derived based on the typical risks and claims in this industry, which often involves property damage but lower risk of serious injury. Factors like number of employees, sales volume, and claims history can impact the final price.

Estimated Pricing: $750

Conclusion

In summary, general liability, commercial property, auto, workers’ compensation and business interruption policies provide essential coverage layers to safeguard automotive parts and tire retailers from unplanned losses. Maintaining proper insurance minimizes financial disruption and allows the focus to remain on serving customers. Business owners should work with experienced agents to evaluate needs and costs.

Frequently Asked Questions

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