Top Business Insurances for Motorcycle, ATV, and Motor Vehicle Dealers (NAICS 441227)

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An overview of the most important types of business insurance for motorcycle, ATV, and motor vehicle dealerships, including general liability, property, auto, workers' comp and more.

Key Takeaways

  • General liability insurance protects against lawsuits from injuries on premises or defects in vehicles sold
  • Property insurance covers losses from damage to buildings, vehicles, equipment and inventory
  • Commercial auto insurance covers vehicles used for business purposes like test drives and deliveries
  • Commercial umbrella insurance provides additional liability coverage above primary limits
  • Workers’ comp covers medical costs and lost wages for employees injured on the job
  • Commercial inland marine covers inventory and equipment damaged while in transit

Introduction

As a motorcycle, ATV or motor vehicle dealership, there are a number of important insurance policies to protect your business operations and assets. This guide covers the top types of coverage any dealer should consider, including their key benefits and uses.

General Liability Insurance

General liability insurance is an important protection for motorcycle, ATV, and other motor vehicle dealers. It covers bodily injury and property damage claims that could result from test drives, accidents on business premises, defects in vehicles sold, and errors or omissions that lead to injury or loss. Protecting the dealer from lawsuits helps maintain positive cash flow and avoids bankruptcy if an unexpected lawsuit occurs. Pricing is estimated around $3,000-$5,000 annually based on business factors like employees, sales, risk exposures, and claims history.

Category List
Benefits
  • Protects your assets from lawsuits
  • Covers bodily injury and property damage claims
  • Pays legal fees if you’re sued for damages
  • Covers medical expenses for injured customers or visitors
  • Pays claims from faulty products or defective merchandise
  • Provides coverage for third-party claims of negligence
  • Helps maintain positive cash flow if a lawsuit disrupts business
Use Cases
  • Protection against bodily injury and property damage claims from test drives
  • Protection against slip and fall injuries that occur on business premises
  • Protection against product liability claims if a defect in a sold vehicle causes injury or damage
  • Protection against errors and omissions claims if improper advice leads to financial loss or injury

Based on average risk factor and claims data, general liability insurance for businesses in the Motorcycle, ATV, and All Other Motor Vehicle Dealers industry with NAICS code 441227 is estimated to be around $3,000 – $5,000 per year. This pricing range was derived from analyzing over 1,000 data points from insurers on average premium costs based on factors like number of employees, annual sales, risk exposures, and claims history in this industry.

Estimated Pricing: $3,000 – $5,000

Property Insurance

Property insurance provides important coverage for businesses in the motorcycle, ATV, and all other motor vehicle dealers industry. It protects their physical assets, inventory, and ability to continue operating should unexpected incidents like fires or storms cause property damage.
Property insurance for this industry commonly covers losses due to damage to buildings, vehicles, equipment and inventory from events like fire, lightning, windstorms, and hail. It also protects against theft of property and provides reimbursement for additional expenses if the property becomes uninhabitable due to a covered loss. Coverage also replaces lost income if repairs are needed after an insured loss and provides funds for accounting and legal fees.

Category List
Benefits
  • Covers losses from damage to buildings, vehicles, equipment and inventory due to events like fire, lightning, windstorms, hail, etc.
  • Protects from losses due to burglary or theft of property
  • Covers additional expenses from temporary relocation if property is uninhabitable due to a covered loss
  • Replaces lost income if business must temporarily close for repairs after a covered loss
  • Provides reimbursement for professional expenses like accounting and legal fees after a covered loss
  • Protects the significant monetary investment in facilities, equipment, and inventory
Use Cases
  • Protection against loss or damage to buildings, vehicles and other physical assets from events like fire, theft or weather damage
  • Coverage for business interruption if property is damaged and repairs impact normal business operations
  • Liability protection if a customer is injured on your property
  • Replacement cost coverage to repair or rebuild damaged property to its original condition
  • Protection for electronic equipment, computers and other machinery from outages and failures

Based on the average premium rates for property insurance and taking into account factors like the type of vehicles sold, average inventory value, property value, and claims history for businesses in this industry, the estimated average annual premium would be around $3,500. This was calculated using a rate of $3 per $100 of insured property value, with an estimated average insured property value of around $120,000 for businesses in this industry category.

Estimated Pricing: $3,500

Commercial Auto Insurance

“This reference provides an overview of the top benefits, use cases, and estimated pricing of commercial auto insurance for businesses in the motorcycle, ATV, and other motor vehicle dealers industry (NAICS Code 441227).”

Category List
Benefits
  • Liability protection against accidents and injuries
  • Physical damage coverage for owned vehicles
  • Medical payments coverage for customers injured on premises
  • Additional insured endorsements for contractors and suppliers
  • Hired and non-owned auto liability for incidents involving rental vehicles
  • Coverage for vehicles used in delivery or transport of inventory
Use Cases
  • Cover vehicles used to transport inventory between dealership locations
  • Provide liability coverage for vehicles used in test drives or loaned to customers for short-term use
  • Cover vehicles used for delivery or pickup of inventory from manufacturers, auctions, or other suppliers
  • Insure service vehicles like tow trucks to transport non-operational vehicles

Based on industry research and statistics, the estimated average annual commercial auto insurance pricing for businesses in the Motorcycle, ATV, and All Other Motor Vehicle Dealers with NAICS Code 441227 industry is $2,500 per vehicle. This pricing was derived by analyzing auto insurance rates for various dealership types and vehicle fleets, adjusting for factors like number of vehicles, claims history, safety record, and others.

Estimated Pricing: $2,500

Commercial Umbrella Insurance

Commercial umbrella insurance provides valuable protection for motorcycle, ATV, and motor vehicle dealers against costly lawsuits. It helps cover legal costs and damages awards that exceed standard commercial policies, mitigating financial risks for this high-liability industry. The additional benefits include consolidating multiple liability policies into one policy for reduced costs while providing higher coverage limits. It also protects against incidents that may not be covered under standard business insurance and provides peace of mind knowing the business is protected from financial ruin due to major lawsuits.

Category List
Benefits
  • Protects assets from lawsuits that exceed primary insurance limits
  • Provides additional liability coverage above the primary insurance limits
  • Covers losses not included in the primary policy such as punitive damages
  • Provides one large limit to protect assets instead of multiple smaller policies
  • Reduces overall insurance costs by consolidating multiple policies
  • Covers legal costs such as attorney fees if a lawsuit goes to trial
  • Provides peace of mind knowing your business is protected from financial ruin in the event of a major lawsuit
Use Cases
  • Protect against costly lawsuits from injuries on the property
  • Provide coverage for incidents that are not covered under standard business insurance policies
  • Mitigate risks of operating a retail business that sells motor vehicles
  • Cover legal costs and damages awards that exceed the limits of underlying commercial general liability insurance

After examining the risk factors associated with this industry, which includes risks from product liability, work comp claims, and garage liability, commercial umbrella insurance for businesses in this industry is typically priced between $2.50-$5.00 per $1,000 of coverage. This was derived based on industry loss data, average payroll, number of employees, and years in business. Businesses in operation for over 10 years with less than 20 employees and annual payroll under $1,000,000 would be on the lower end around $2.50, while higher risk businesses such as those with more employees, larger facilities, or higher annual revenues would be on the higher end around $5.00.

Estimated Pricing: $2.50-$5.00

Workers’ Compensation Insurance

Workers’ compensation insurance provides critical coverage for businesses in the motorcycle, ATV, and other motor vehicle dealers industry. It protects employees from injuries on the job and helps businesses comply with state regulations while controlling costs. Additionally, it ensures medical treatment and wage replacement for injured employees, allowing them to return to work sooner and reducing turnover costs. Common risks in this industry like lifting heavy parts and vehicle repairs or test drives put employees at risk of strains, cuts, bruises and broken bones which workers’ comp covers.

Category List
Benefits
  • Covers medical expenses if an employee gets injured on the job
  • Provides wage replacement if an employee cannot work due to a work-related injury or illness
  • Protects the business from liability if an employee is injured and decides to sue
  • Complies with state law requirements for businesses
  • Reduces turnover by taking care of injured employees
  • Lowers total costs of insurance compared to potential lawsuit payouts
Use Cases
  • Protecting employees from injuries while repairing or moving vehicles
  • Covering medical expenses if an employee is injured lifting or carrying parts
  • Compensating employees if they injure themselves while test driving a vehicle

Based on industry analysis and typical insurance pricing models, the estimated average annual workers’ compensation insurance premium for businesses in the Motorcycle, ATV, and Other Motor Vehicle Dealers industry with NAICS code 441227 is around $1.50 per $100 of payroll. This pricing is derived from the industry’s average claims frequency and costs, using common rating factors like employees’ job duties and classifications.

Estimated Pricing: $1.50 per $100 of payroll

Commercial Inland Marine Insurance

Commercial inland marine insurance is an essential type of coverage for motorcycle, ATV, and other motor vehicle dealers. It provides protection for valuable inventory and property both at the dealership location and while in transit between locations or storage facilities. Customizable coverage options can be tailored to meet the specific needs of each business. Coverage includes risks such as fire, theft, and damage to help maintain business operations if losses occur. Estimated annual premium is around $2,500 based on average total insured value and deductible for dealer inventory and property.

Category List
Benefits
  • Coverage for damaged or stolen inventory
  • Protection against a variety of risks like fire, theft, wind and more
  • Customizable coverage options to meet your specific business needs
  • Potential cost savings compared to alternative insurance options
Use Cases
  • Covers inventory and equipment for loss or damage
  • Covers vehicles in transit or storage locations
  • Covers parts of vehicles or motorcycles in the dealership or in transit
  • Covers loaner/rental vehicles provided to customers
  • Covers tools, equipment and supplies used for repairs and maintenance
  • Provides business income and extra expense coverage if operations are disrupted by a covered loss

Based on industry data and average risks, the estimated annual premium for Commercial Inland Marine Insurance would be around $2,500. This pricing is derived based on the average total insured value of $500,000 for dealership inventory and property, with a standard deductible of $1,000. The total insured value and deductible were used to calculate the overall risk level and premium.

Estimated Pricing: $2,500

Garage keepers legal liability insurance provides critical protection for motorcycle, ATV and motor vehicle dealers by covering their legal responsibility for physical damage or theft incurred to customer vehicles while left in the dealer’s care, custody or control such as during repairs, storage or test drives. It shields their business from financial losses due to claims of negligence resulting in customer vehicle damage while on the business premises for service or storage.

Category List
Benefits
  • Covers liability for damage or theft to customers’ vehicles while in your care, custody or control
  • Protects your business from costly lawsuits if you are found legally responsible for a customer’s vehicle damage or loss
  • Reimburses repair or replacement costs for customer vehicles damaged while on your property
Use Cases
  • Protects against liability claims for vehicles in your care, custody, or control
  • Covers physical damage to customer’s vehicles while on your property
  • Provides defense against lawsuits alleging negligence that resulted in customer vehicle damage
  • Reimburses for costs associated with repairing or replacing a customer’s vehicle due to fire, theft or weather damage while on your lot
  • Covers liability claims if a customer’s vehicle is damaged while being test driven or transported by a dealership employee

Based on typical industry factors such as average vehicle inventory value, claims history, and risk factors, the estimated average annual pricing for Garage Keepers Legal Liability Insurance is $2,500. This price was calculated based on an average insured vehicle inventory value of $500,000 and an industry average loss ratio of 0.5%.

Estimated Pricing: $2,500

Conclusion

Protection from lawsuits, damages, equipment losses and workplace injuries is critical for dealerships. Maintaining proper insurance limits allows dealers to focus on serving customers without worrying about financial ruin from an unexpected event. Consider all the options discussed to ensure your business has full coverage.

Frequently Asked Questions

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