Would your automotive business be able to handle these common insurance claims?
According to a range of automotive industry sources, the top claims are for:
- Business interruption, including when a business must close or slash operations due to unforeseen events
- Equipment damage, loss, or business premises disruption due to theft, vandalism, or accidents
- Public liability, when a customer or visitor is injured on your premises, or damage to vehicles in your care
- Cybersecurity, such as if your customer and/or staff data you hold is hacked.
As an auto service business owner, you know the crucial role mechanics play in keeping vehicles on the road. With high demand for mechanic services, it’s vital to protect your business and income from operational risks. The right insurance secures your livelihood and shields you from potential setbacks.
Diving Deeper into the Risks Motor Trade Businesses Face
Running an auto service shop involves significant risks that can disrupt operations and lead to financial losses. Workplace hazards, such as exposure to harmful chemicals, slips, falls, and back injuries from heavy lifting, are common. Road testing vehicles also introduces accident risks.
The industry faces severe staff shortages. According to a Motor Trades Association of Australia (MTAA) report, half of Australian workshops have lost a technician in the past two years, and a quarter have lost a master technician. Only 40% of electric vehicle technician vacancies and two-thirds of apprenticeship vacancies are filled, with an overall industry fill rate of just 39%. Many workshops need motorcycle mechanics, panel beaters, diesel motor mechanics, vehicle body builders, and automotive dismantlers.
Even fully staffed workshops struggle with parts sourcing due to global supply chain issues. These risks can drain financial resources through repair costs, legal fees, medical expenses, overworked staff, and the challenges of recruiting and training new staff.
Essential Types of Mechanic Insurance Policies
- General Liability Insurance: Covers premises liability, which protects you if a customer is injured on your property.
- Workers’ Compensation: Protection for employees who are injured or fall ill due to their work.
- Garage Keepers’ Liability Insurance: This policy is essential for covering customers’ vehicles under your care.
- Property and Crime Insurance: This cover protects your repair shop building and its contents against risks such as natural disasters, theft, and vandalism.
- Equipment Breakdown and Business Auto Insurance: Auto repairs rely heavily on specialised tools and machinery; make sure you can quickly replace or repair critical tools.
Extra opt-in coverages are also available. Some important policies to consider include professional indemnity, which covers claims of negligence or mistakes in your workshop’s services. There’s also customer vehicles cover, which adds an extra layer of protection for vehicles in your care.
Bundling these coverages into a comprehensive business insurance package can provide better overall protection and often at a reduced premium cost.
Choosing the Right Insurance for Your Auto Service Business
Selecting the right insurance for your auto service business involves assessing your specific risks and needs. We can help you evaluate hazards like location-based risks and the types of vehicles you service, identify coverage gaps, and customize a comprehensive policy.
Regularly reviewing and updating your policies ensures you’re prepared for any eventuality.
If you want to know more about insurance for the auto service industry CLICK HERE or contact us to discuss your specific needs.