Workers’ compensation insurance for auto services and dealers

Even if you’ve taken precautions, you can’t protect your employees from every accident. From slipping on a slick service floor at a repair shop to being clipped by a vehicle at your gas station, a single injury can be financially crushing for a small business.

When an employee is injured, workers’ comp insurance can cover medical expenses, partial wages during recovery time, and more.

• Immediate medical costs, such as an ambulance ride
• Ongoing medical costs, such as physical rehabilitation
• Partial lost wages while the employee is unable to work

Almost always included in a workers’ comp policy, employer’s liability insurance offers protection when a gas station attendant, mechanic, or other auto service employee decides to sue a business owner over an injury.

Employer’s liability insurance can help cover:

• Attorney’s fees
• Court costs
• Settlements

Even if a lawsuit is frivolous, you could end up paying out of pocket for a costly legal defense. Employer’s liability insurance, however, does have limits on how much it will pay for a lawsuit.

The amount you pay for workers’ compensation is a specific rate based on every $100 of your business’s payroll. Your premium is determined by the type of work done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).

The formula providers use in underwriting to calculate workers' comp rates is:

Each state has its own laws for workers’ compensation insurance. For example, gas stations in New York must carry workers’ compensation insurance for their employees – even part-time workers. However, Alabama gas stations are only required to carry workers’ compensation when they have five or more employees.

While sole proprietors and independent contractors don’t have to carry workers’ compensation insurance, you can purchase a policy to protect yourself, too. It's a good idea to carry this coverage for financial protection against work injuries, which health insurance might not cover.

In certain states, auto service businesses and dealerships must purchase coverage through a monopolistic workers' comp state fund. Those states are:

• North Dakota
• Ohio
• Washington
• Wyoming

If you purchase workers’ comp through a monopolistic state fund, it might not include employer’s liability insurance. However, you can purchase it as stop gap coverage from a private insurance company.

Whether your employees repair cars, pump gas, or sell cars, working with vehicles is a risky business. You can make your service station or dealership safer with:

• Employee safety training
• Proper equipment, such as gloves and goggles
• Regular equipment maintenance, including fuel tanks and pumps

Through a safe work environment and risk management, you can reduce the likelihood of an injury. That means less claims – and a lower insurance premium.

Workers’ compensation insurance protects your employees and to some extent your business, but it doesn’t cover common risks such as property damage and customer injuries. Other recommended policies for auto service shops and dealerships include:

General liability insurance: This policy can pay legal expenses related to customer property damage and injuries, along with advertising injuries such as slander.

Business owner’s policy: A BOP combines general liability coverage and commercial property insurance, usually at a lower rate than if the policies were purchased separately.

Commercial auto insurance: This policy covers costs after an accident involving a business's vehicle. Each state has its own requirements for auto liability coverage.

Cyber insurance: This policy helps automotive businesses recover from cyberattacks and data breaches. It's recommended for any business that stores credit card numbers or other personal information.

Commercial umbrella insurance: An umbrella policy boosts the limits on your other liability policies, such as general liability, commercial auto, and employer's liability insurance.

Garage keepers insurance: This policy provides coverage in the event that a customer’s vehicle is damaged or stolen while in your care. It's recommended for any auto business that services or stores vehicles.

Are you ready to safeguard your auto service business or dealership with workers’ compensation or another type of insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.