Why Insurance is an Absolute Must for Your Auto-Detailing Business

On the surface, it might appear as if operating your own mobile or fixed-site auto detailing business would be a piece of cake. Buy some equipment, stock up on some auto detail products from Detail King, and hit the road looking for car-owning prospects.

But here’s where we remind you that your new enterprise is a bona fide business undertaking — a venture that should include the appropriate amounts of planning, troubleshooting and an entire notebook page full of “what ifs.” And chief among those considerations should be insurance.

We know. We’ve heard it before. “Nothing’s going to happen,” you say. “It’s such a small business — I don’t need insurance,” you reason. “Insurance will just eat up my profits,” you claim.

Truth of the matter is, one of the first things you should be looking at — maybe even before picking out a rotary buffer and an orbital polisher — is business insurance. And that’s particularly important when you consider you’re working daily with other people’s property.

What we offer below is information on the three basic insurance components for an auto-detailing business — general liability insurance, garage keepers insurance (fixed-site location), business interruption insurance, and workman’s compensation insurance.

General Liability Insurance

A part of the general insurance system of risk financing is to protect you from the inherent risks of liabilities imposed by lawsuits and similar claims. Among a laundry list of other potential mishaps, this coverage protects your auto detailing customers in the event one of them is injured by a piece of equipment on your property or even in the case that a customer trips on a cord or hose and falls down and is injured while you’re doing work for them. You should look for coverage quotes in the $500,000 to $1 million range, which covers general liability in those amounts for your shop and/or mobile operation.

While you’re at it, inquire about an “umbrella” policy that can help you obtain lower rates and provide a wider range of coverage. And you’re certainly not wasting time obtaining two or three quotes from various carriers — in fact, do that every couple of years to make sure you’re still getting the best rates.

Garage Keepers Legal Liability Insurance

For those operating a fixed-location auto detailing business, you should ask your insurance agent about Garage Keepers Insurance. Here, you want to look for coverage in the $50,000 to $100,000 range for damage to your customer’s vehicles during the time they are in your possession. In addition, coverage should include theft, fire and movement of the vehicles and/or delivery.

Here, if you do experience the occasional small claim along the way, it may be far better to shell out the money yourself. Turning small claims in to your insurance carrier may result in a higher premium.

Here are some more things to keep in mind when seeking general liability insurance:

  • If your operation provides pick-up and delivery of customer’s vehicles, a clean driving record keeps premiums low.
  • Same thing goes for your employees. Before hiring anyone, make sure their driver’s license isn’t suspended, revoked or chock full of points. This can also affect your insurance rates.

Monthly insurance premiums for a mobile auto detailing business with $500,000 of general liability insurance and $75,000 in Garage Keepers coverage is around $125 per month based on the principle owner having a good driving record. If you are going to use your personal vehicle as your “mobile rig,” you may have to have your policy upgraded to a Commercial policy and that is where “umbrella” coverage could help defray the costs.

Business Interruption Insurance

Business interruption insurance (a.k.a. business income insurance) covers the loss of income that a business suffers after a disaster while its facility is being rebuilt. If you carry this type of insurance and your auto detailing location is hit by flood, fire or other event that prevents you from working out of the insured location, your expenses are typically for 60 to 90 days.

Workman’s Compensation Insurance

Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue you for negligence. While the cost of workman’s compensation insurance is based on the type of business you run and the number of people you employ, it’s wise to budget on average between $50-$100 per employee per month for coverage. Workman’s comp can typically be purchased from the state in which you do business. And if your business is primarily detailing cars, your business should be rated under the classification of “auto laundry.” Just make sure the insurance doesn’t rate you as “auto service,” because your premium will typically be much higher under that type of classification. And as with all other forms of insurance, any claims made could increase the premium.

One final recommendation: Regardless of which type insurance you carry for your auto detailing business, be sure the insurance carrier is first and foremost a “rated” carrier by a credit rating agency dedicated to serving the insurance industry. For example, A.M. Best’s Credit Ratings are independent opinions regarding the creditworthiness of an issuer, and you want to look for an A.M. Best rated “A” (A, A-, A+) carrier for your auto detailing business coverage.

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Comments (15)

  1. website seo says:

    Excellent post. I was checking constantly this blog and I’m impressed! Extremely useful information particularly the last part :) I care for such info much. I was seeking this particular info for a very long time. Thank you and good luck.

  2. Pandora says:

    I like this post, enjoyed this one appreciate it for putting up.

  3. Joe S. says:

    Thanks for sharing this great information. I have had to use my insurance a time or two and I am so glad I had it in place. The first time was on a $250,000 car. If I had no insurance I would have been in BIG trouble.


  4. Having insurance should be a no brainer these people are trusting you with their,in some cases, life long dream car! They hire you to protect their investment it only makes sense to protect them.

  5. excel says:

    Thanks, Great Information

    Greetings from India

    Excel Car Spa
    autospa on wheels


  6. Nick V says:

    You are welcome Joe, let us know if you have any questions or comments!

  7. Mark Barger says:

    Great information for a fledgling detailer. Insurance is a MUST in any business.

  8. Mike F. says:

    Couldn’t agree more here…I own and operate a Auto Detailing Service in Connecticut that has rapidly grown over the past few years, with the amount of cars coming and going it is a MUST to have insurance. Thanks!

    Mike F. Owner
    M & M Auto Detailing LLC
    799 Hebron Avenue
    Glastonbury, CT, 06033
    (860) 430-1889

  9. Thanks for the info. I needed clarification on the differences between Garage and Garage Keepers insurance. Do you recommend any agencies that you have had a good experience with?

    Car Wash Genie
    1411 sw 30th ave, Bay 3b
    Pompano Beach, Fl 33069

  10. Marcus says:

    Insurance is not expensive at all…i think the difference between Garage Keepers is with Garage Keepers, you can detail cars at your location.

  11. This is my first time pay a quick visit at here and i am genuinely impressed to
    read all at alone place.

  12. Steven Lucas says:

    This is very good information and I know as a business man I definitely have to have this applied. I’m not going to let a slip and fall or a couple of scratches to someone’s property destroyed my business

  13. Darin Cate says:

    In addition to being protected with insurance I’ve been able to land many jobs that require the necessary insurance coverage.

  14. Tony Smith says:

    I would like to thank everyone for all the great information I’m new to the detail world it is great that someone is sharing information wish everyone much success from hard2top detail

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