Mechanics operate in various sectors, such as aviation, aerospace, commercial, manufacturing, and residential environments.
Their primary responsibilities include installing, repairing, and maintaining mechanical components.
For customers, they plan cost forecasts, clean, and maintain various pieces of equipment and machinery.
Because of the nature of their work, mechanics and automotive technicians’ businesses are fraught with risk. Any mechanic workshop owner is responsible for the health and safety of his or her workers.
Garage and auto repair shop owners need business insurance to cover their properties from the risks involved with performing maintenance on other people’s vehicles. Any accident or property damage can potentially lead to an expensive claim or lawsuit.
However, with the right insurance plans customized to your specific needs, you reduce the risks and consequences and can remain in business for the long haul.
In this article, we’ll focus on some of the more popular types of business risks for auto repair shops and how you can safeguard your business from them.
Typical Business Risks for a Mechanic
Theft or Robbery
Because of the large number of materials and machinery needed for the job, theft is a common occurrence in the motor repair industry. Much of the time, the machinery is left on-site and is highly valuable, making garages and similar establishments appealing targets for theft.
Also, cash and personal belongings of both clients and employees are often left overnight, providing an additional motive.
Working with complex machinery is dangerous, particularly when a mechanic must evaluate moving parts while they work. As a result, one of the risks of the work is physical injury.
The physical environment in which mechanics operate can also be hazardous, with areas such as service pits, stairs, and hoists increasing the possibility of trips or injuries and frequent personal injury lawsuits.
Damage to Automobiles
Vehicles are an expensive piece of machinery, so any harm to a client’s car can result in expenses for the auto shop. Novice mechanics could potentially damage the increasingly complex electrical components found in newer vehicles. For this reason, lawsuits from damaged customer property can account for a sizable portion of insurance payments.
Fire Damage to Property
Fire will always be a risk for any company with a physical location. The risk is significantly higher in the motor trade due to heat-generating industrial machinery such as welders and steel cutting tools, which can trigger sparks. Because of the constant interaction with electrical components, there is a risk of short circuits, which can also cause a fire.
Road Dangers and Risks
Test-driving is a common practice among mechanics and is often required so that any maintenance work can be thoroughly evaluated. Because of this test driving, there is an increased risk of traffic collisions.
As a result, collisions with other vehicles are relatively common and need to be insured against.
What Does Mechanic Insurance Cover?
Mechanic insurance and auto shop insurance are essential for every business owner in this industry.
Garage insurance will cover the auto shop owner against injuries and property damage that your business operations cause to people who aren’t employees.
A business property insurance policy will protect your auto repair shop building, and you’ll still want to consider coverage for the specific equipment. These types of insurances include:
- Portable tools and equipment coverage
- Employment practices liability insurance
- Business Continuation Insurance
Third-Party Fire & Theft will cover third-party lawsuits for any injury, as well as fire or theft of customer vehicles while in your possession.
Anyone working from a commercial auto shop location is advised to obtain a Motor Trade Combined policy.
This cover can include all listed above and extras such as the property itself, equipment, plant and machinery, business disruption, money held on location, and overall inventory.
How Can you Apply for Mechanic Insurance?
First, consider what kinds of injuries, natural disasters, or lawsuits might harm your mechanic shop business.
Mechanic insurance brokers will assist you in locating insurance plans that are appropriate for your auto shop’s needs.
When it comes to insurance for mechanics, be aware that prices and benefits will differ significantly. You should compare the prices, conditions, and privileges of insurance policies from various agents.
Every year, it also a good idea to re-evaluate your mechanic insurance plan. When your business expands, so will its liabilities.
If you have bought or replaced equipment, or if your company has changed, you can consult your insurance broker to address the adjustments and how they influence your policy.
Finding The Right Insurance for Your Auto Shop
Automotive repair shops, automotive mechanics, and auto body shops are entrusted to repair their clients’ vehicles and keep those cars safe when under their care. For this reason, you must ensure you have insurance coverage to cover you financially.
If you own a mechanic garage or auto shop that repairs cars for the general public, you can consider purchasing additional insurance to ensure that you and your company are completely covered from any number of accidents that might occur on-site.