When you think about the risks associated with running a car dealership, the first few things that may come to mind are theft or damage to your inventory. But there is a much broader range of potential risks that can have serious consequences for your business.
And in times like these with inventories struggling to recover and interest rates rising, dealers need all the protection that they can get. That’s where General Liability Insurance plays such an important role in protecting dealers.
What is General Liability Insurance?
General Liability Insurance is one of the more common types of commercial insurance that covers a wide range of risks your dealership may face. This can include things like property damage, bodily injury, or advertising fraud. If your dealership is found to be at fault for any of these issues, it can help cover the cost of any damages or legal fees that arise as a result.
One of the most important things to understand about General Liability Insurance is that it provides protection for risks that can arise from many different types of situations - even things you never would have thought of.
For example, if a customer slips and falls on your dealership’s property and suffers an injury, this insurance will cover their medical bills and any other expenses related to the injury.
What if your dealership is sued for defamation or copyright infringement related to your advertising? Yep…that’s covered. It will handle the cost of legal fees and any damages that may be awarded.
Another important thing to keep in mind is that General Liability Insurance can help protect your business from situations that may not be your fault.
If a customer’s vehicle is damaged while it’s in your Service lane for repairs, and even if the damage is caused by an employee, General Liability Insurance can help cover the costs of repair and/or replacement.
This is especially important for dealerships that sell highline/luxury vehicles or classic cars…no one wants that bill for replacement or repair.
Covers the Intangibles, Too
This protection for your dealership goes another step beyond. General Liability Insurance can help protect your dealership’s reputation. If a customer is injured or suffers property damage as a result of an accident on the lot and you don’t have insurance to cover the costs, it can create a PR nightmare for the business and negatively impact how you’re viewed in the community.
After all, people talk.
But if you have a comprehensive General Liability policy in place and are able to quickly address the situation, it can help demonstrate that your dealership cares about its customers and making a bad situation ‘right’.
How is General Liability Insurance Different for a Dealer?
Why is this type of commercial insurance particularly important for a dealership versus a retail shop or restaurant? The answer comes down to the unique risks that dealers face.
Car dealerships typically have a lot of foot traffic and high volumes of expensive inventory. This can make them a prime target for theft or vandalism. Headlines across the country over the last few months are growing with stories of thieves smashing into dealerships, stealing keys, and driving off with tens of thousands worth of cars.
What about test driving? Think that’s a ‘unique risk’? You bet it is.
If a customer is injured while test driving your vehicle, General Liability Insurance can help cover the cost of their medical bills and any other expenses related to the accident or injury. Every test drive is a risk and dealers always hold their breath until the car comes back in one piece from its trip around the neighborhood.
It’s also worth considering the potential legal costs associated with these types of situations. If a customer is injured or there is property damage related to a customer vehicle, they may decide to sue and cost your dealership a ton in legal fees.
Even if you ultimately prevail in the lawsuit, the fees alone and other costs related to defending yourself can be substantial. General Liability Insurance is there to shield your business from those expenses and give you peace of mind.
Whether you have a new or used dealership, it’s important to have a comprehensive General Liability policy in place to protect your business from a host of potential risks. It helps protect your reputation and show a strong commitment to your customers’ safety and well being.
DealerSure is here to be your one-stop-shop for all of your commercial insurance needs and we’ve made it easy to have us compare your existing coverage with our program to help show you how to get better coverage for less. Reach out today for a confidential comparison.