Speed Shop Insurance
Written by
Ann Herro has been writing about insurance and employee benefits for over 15 years. She has covered topics as easy as insuring a car, and as difficult as transparency in healthcare costs.
Reviewed by
Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.
Speed shops are retail establishments that typically sell and install aftermarket automotive accessories that are intended to increase the speed or performance of a wide variety of vehicles. They first became popular with the rise of the “hot rod” culture in America during the 1940s and 1950s, and many speed shops are still in existence.
Today’s speed shops typically sell, diagnose, and install performance solutions for domestic cars, muscle cars, late model super cars, and motorcycles. Speed shop owners have to be experts in cars from the 1950s to the newest models, as well as 4x4s, imports, motorcycles, and more.
Any kind of shop or retail store should purchase business insurance in order to protect their assets, and speed shops are no different. Business insurance typically covers basic property and liability risks, but owners of speed shops need to make sure that their insurance policies are customized to their specific needs.
A local independent insurance agent can help you find insurance that covers the risks of your speed shop.
Why Do You Need Speed Shop Insurance?
Speed shops repair, rebuild, and retrofit cars to enhance their speed and performance. This often involves detailed diagnostics, machining, balancing, electrical work, tuning, suspension, engines, performance brakes, super-charging, restoration, interior upgrades, and a wide variety of additional custom upgrades. If you own a speed shop, you might stock or have access to thousands of high-performance products from hundreds of auto parts manufacturers.
Owning a speed shop requires a high degree of knowledge and service, as well as keeping large volumes of expensive inventory and equipment on hand. What’s more, you’re entrusted to keep your customers’ cars safe while they’re in your care.
In addition, speed shops face the following types of business risk:
- Slips and falls on your premises
- Damage to your building or inventory due to fire, bad weather, vandalism, or theft
- Worker illness or injury
- Faulty workmanship or parts
- Employee theft or crime
- Business interruption
You need a variety of business insurance policies to protect your business from these risks. Most importantly, you need garage liability insurance and garagekeepers liability insurance. Both are designed to help you protect your customers’ property and your business in wake of accidents, injuries, or property damage.
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What Is Garage Liability Insurance?
Garage liability insurance provides several forms of liability protection specifically designed for the needs of garage and auto body shop owners, including speed shops.
A basic garage liability insurance policy is designed to cover bodily injury or property damage caused by an accident during garage business operations. Garage liability coverage is typically purchased by automobile dealerships and repair shops, among other businesses. It covers:
- Third-party injuries
- Property damage caused by equipment owned by the business
- Products manufactured or sold by the shop that cause damage to a customer’s vehicle
If a customer slips and falls at your shop, this coverage will help pay for any related medical bills and your legal fees if he or she decides to sue you. It will also help pay for damages if a vehicle owned your business causes a collision with another automobile or structure, damaging a third party's property.
What Is Garagekeepers Liability Insurance?
Garagekeepers liability insurance: This is specialty business insurance coverage designed for auto repair shops as well as service stations, auto body shops, detail shops, vehicle electrical and repair shops, auto glass installers, oil change and lube shops, emissions testing sites, and just about any other type of establishment that provides parts or service for vehicles and temporarily stores those vehicles on-site.
Garagekeepers liability insurance protects you if a customer’s vehicle is damaged due to your negligence while it is in your care, custody, or control. This protection is not included in the standard garage liability policy. There are a number of ways in which a customer’s vehicle can be damaged while in your possession, such as fire, theft, weather events, vandalism, employee test drives, and lift accidents — to name a few.
Garagekeepers liability insurance does not cover the contents of a customer’s vehicle, and also does not cover damage that occurs as a result of faulty workmanship, parts, or insufficient warrantees.
What Other Insurance Policies Do Speed Shops Need?
In order to protect your speed shop from all of the risks you face, you need a variety of other business insurance policies that protect your property and can help you pay for your legal fees if you’re sued for some kind of negligence.
- Commercial property insurance: This is essential for proprietors who own their buildings or whose business handles a large volume of inventory. Business property insurance protects you if a fire, vandalism, smoke, theft, or other type of event damages your property. It provides coverage for lost inventory, office equipment, computers, and more.
- Commercial property insurance policies usually include business interruption coverage, or business income coverage, which protects your earnings if your business is unable to operate because of damage caused by some type of disruption (fire, hail, wind, equipment breakdown). This coverage is usually quite affordable and will be invaluable if you are forced to close your doors for a period of time in order to make repairs. It pays for rent, employee salaries, lost income, relocation fees, and more.
You can expand your business income policy to include coverage for breakdowns in utility services (water, electrical) that force you to temporarily close your doors.
Owners of speed shops may want to consider a business owners policy (BOP) if they qualify for one. BOPS are designed for small businesses and include liability, property, and business income insurance in one affordable package policy.
Do you own any business autos, trucks, or vans? If so, you need commercial auto insurance. Business auto insurance covers your company’s vehicles and drivers (cars, SUVs, vans and trucks) that are damaged or injured in a collision or some other type of event.
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What Is Employee Theft and Crime Coverage?
Employee theft and crime coverage: This can protect your businesses from the costs of theft, dishonesty, and fraudulent acts committed by an individual employee or a group of employees. While it may be difficult for you to imagine, employees all too often steal property, money, and securities owned by their employers.
Employee dishonesty coverage can be purchased as a stand-alone policy or as an endorsement on other business insurance policies. A basic stand-alone employee theft and crime policy provides coverage for forgery, alteration, theft, unauthorized electronic funds transfers, credit card fraud, computer fraud, money order fraud, and counterfeit fraud. You can also add endorsements for additional coverage.
Workers’ Compensation Insurance Is Essential for Speed Shops
Accidents happen, even in the safest workplaces. Speed shops can be dangerous places, particularly for the employees who do the work. The potential for smashed hands and crushed limbs from machinery or falling vehicles is with you and your employees every day. And if one of your employees gets injured while on the job, he or she may not be able to work until fully recovered.
Workers’ compensation insurance: This protects your employees and your business from the costs associated with work-related injuries and illnesses. It provides coverage for medical care and income protection for an injured worker while he or she is unable to work. Workers’ compensation insurance also helps protect employers from lawsuits by injured employees.
Each state has workers’ compensation insurance laws. Most states require nearly every business that has employees to provide this coverage. Your state’s workers’ compensation statutes determine the amount of benefits injured workers are entitled to, which impairments or injuries are covered, how those impairments will be evaluated, and how medical care will be delivered.
Talk with your insurance agent about workers’ compensation insurance. Your agent should be able to educate you about your state’s workers’ compensation requirements, and help you find adequate coverage.
Other Coverage to Consider for Your Used Speed Shop
In addition to the insurance policies described above, speed shops will want to consider some of the following types of business insurance. Whether or not you need them depends upon your specific business needs.
- Equipment breakdown/boiler and machinery coverage
- Fire legal liability coverage
- Employment practices liability coverage
- Cyber liability coverage
How Much Does Speed Shop Insurance Cost?
The cost of speed shop insurance varies depending on the size of your business, the number of employees you have, how much business property (buildings, inventory, and equipment) you have, and the types of services that you provide in your garage.
Business insurance costs are also higher or lower depending on the location of your business, whether or not you own any commercial vehicles, and how risky your physical space and line of work is to customers and employees.
An independent agent who has experience working with businesses like yours can help you decide the types and amounts of coverage you need for your speed shop. The choices you make will determine your cost of coverage.
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right speed shop insurance. They’ll walk you through the handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get — but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can omit important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.