Whether you are a mobile detailer, work alone, or have a physical location with employees, having insurance is super important as a business owner.
For today’s post, I enlisted the help of Stephanie Dohmlo. Stephanie is a twenty-year veteran of the insurance industry, having served as an agent, broker, and worked in compliance. After having her son, she started writing process and procedures for insurance agencies, and I am excited to share this information for everyone looking into insurance for your car wash or detailing business.
Keep in mind, always seek professional guidance before purchasing any kind of policy, and we do not make any legal promises or guarantees with the information given.
The purpose of this post is to just to provide some basic information to really give you a better understanding as a detailer of a few common types.
What insurance does my mobile detailing service need?
Whether you just started your mobile detailing service or are established, making sure your business is properly protected by insurance is crucial. Most mobile detailing services need General Liability, Commercial Property, and Workers Compensation. If you drive or store your client’s vehicles a Garage Keepers policy may also be a good idea.
A Commercial Umbrella policy is a must to protect your assets, especially as your business grows. They are inexpensive protection for catastrophic claims.
If you are washing for car dealerships or other larger businesses, they may require your business to have limits that match theirs, so keep that in mind when shopping for insurance.
Your business needs General Liability to cover your liability as an owner.
- General Liability covers your premises liability – even if you are mobile it protects you from someone tripping over a cord or hose while you are detailing a car on someone else’s premises. General Liability is also referred to as “slip and fall” coverage, because most of the claims arise from slips and falls at the business.
- Completed Operations is included in the general liability policy – if you use the wrong cleaning product on a vehicle and damage the interior or the wax you used cause damage to the paint – those would be covered under your completed operations coverage.
- Pollution Liability can be endorsed on to the general liability policy. Using soaps and chemicals in public parking places, pollution liability is important for your business.
Garage Keepers Legal
If you only detail vehicles at their owner’s location and you never drive them or store them, your business may not need Garage Keepers.
Garage Keepers is physical damage for the automotive service industry. It covers fire, theft, vandalism while a car is in your care, and collision while a shop employee is driving a customer’s car.
Most mobile detailing services do not need this coverage, but it is available if you drive your customer’s vehicles to your location or store them. Garage Keepers policies are designed for brick and mortar shops who keep vehicles overnight.
Business Auto Insurance
The detailing van or vehicle that you use to serve your customer’s needs to be covered on a business auto policy.
If the vehicle is customized or has any permanently attached equipment like water tanks or pumps, these items can be covered by the commercial auto policy. When covering permanently attached equipment remember to insure the value of the equipment and the installation costs.
A personal auto policy specifically excludes using your vehicle for business and can deny coverage if there is any advertising attached to your vehicle or if an employee is driving. Business Auto Policies offer higher limits and better protection for the large vehicles typically used in business.
Business Owners Policy
A Business Owner’s Policy, or BOP, is a package policy that covers your general liability, equipment breakdown, business interruption, pollution, business property, and cash on hand at the end of the day.
A BOP will provide your business the best coverage by having all your liability and property coverages under one policy. The General Liability portion is the same on the BOP as a standalone General Liability, but companies create special package forms that are industry specific.
These forms have optional coverages that most businesses in your industry need, such as pollution coverage for mobile detailing.
Your business property – all your supplies, water tanks, hoses, pressure washers, etc.… can be covered under a BOP. When scheduling your equipment make sure that the coverage follows you anywhere in your regular operating premises.
Some Business Property endorsements only cover property at your business location, for a mobile service you need coverage that follows you everywhere.
Loss of Use/Equipment Breakdown
Loss of Use/Equipment Breakdown is another coverage included in the BOP. If your pressure washer is damaged and you cannot use it, this coverage will cover a rental or emergency replacement while your claim is being settled.
Business Interruption Coverage
is normally included in the BOP, this coverage will pay your normal income if the business cannot operate due to a covered peril. For a small business, this coverage can mean the difference in staying in business after a claim and losing your business.
The other coverages included in most BOPs are less important – cash and securities on hand, if you are robbed at the end of the day, this coverage will replace the money stolen. Employee dishonesty is an included coverage – if your employee steals from you or a client, this coverage will take care of putting you back like you were.
A BOP is a great investment for any small business!
If you have a physical location with employees or other locations, you may be required to carry Worker’s Compensation.
Worker’s Comp protects your employees if they are injured on the job. If you do not have employees, you may have heard the term ‘ghost policy’. Ghost Policies are worker’s compensation policies for businesses with no employees and the owner is excluded from coverage
Ghost policies do not cover anyone, but if a business you are working for requires you to have a certificate, this is your best (and cheapest!) option.
Commercial Umbrella Policy
Your general liability policy can cover up to $1,000,000, your business auto can cover up to $1,000,000, but if you need limits higher than that, a Commercial Umbrella policy is the best option.
Commercial Umbrella policies can be written up to $5,000,000 and in most cases are written on a “follow form” basis. Meaning if your general liability covers something, your umbrella will too.
As your business grows, or if you are a sole proprietor with assets to protect, you want to make sure you have high enough limits to protect your assets.
Umbrella policies are inexpensive for the coverage they provide, and every business needs this type of coverage in today’s litigious society.
Where should I buy insurance?
You should shop around to several local agents and online. Ask questions about what is covered, where it is covered, is pollution covered. Make sure you have these answers in writing or that they are clearly explained in the written quote and policy.
AM Best is an organization that rates insurance companies on financial strength, and they can provide a quote for you on the AM Best website. The company you choose needs to be A rated with a neutral or positive financial outlook.
Ask other local automotive businesses who their coverage is with and try to find an agent that specializes in your industry. They will be more familiar with the coverages you need and the unique challenges you are facing.