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Security and insurance for the self-serve carwash

October 11, 2010
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Security is a freedom from fear, anxiety, danger and doubt; it is defined as something that gives or assures safety, tranquility, certainty and protection.

The purchase of an insurance policy can certainly help with the security of your car-care business by this definition. Insurance, however, operates most cost effectively when used in conjunction with your other management activities.

Determining hazards
Each of us is responsible for the security of our own business. Carwash owners, managers and supervisors need to determine the security hazards that exist in the wash environment and then develop individual programs.

One of the best ways to do this is to perform hazard assessments for each carwash location in the form of periodic inspections. You can identify previously unrecognized security hazards.

This will require assessing more than one type of hazard. For example:

  • The exterior and interior of the building for its attractiveness to robbers or vandals;
  • Adequacy of lighting both inside and outside the premises;
  • The need for security surveillance measures — mirrors or cameras;
  • Posting signs notifying the public that limited cash is kept on the premises;
  • Posting emergency telephone numbers for the owner, law enforcement, fire and medical services so customers with access to a telephone can make calls for help quickly; and
  • Adequacy of security systems such as door locks, security windows, physical barriers and restraint systems for areas not expected to be open to the public.

The real value of these inspections will not be experienced unless you take corrective measures to fix any problem areas.

What to do when injury or damage occurs
Even the best planning and most effective prevention programs cannot prevent all incidents at your wash. Therefore, it is necessary to also have a plan for investigating incidents that do occur.

Make sure your plan includes all near misses as well as those events actually resulting in injury or damage. Your investigation should include as a minimum:

  • Compare the current event to any other previous similar incident;
  • Visit the scene of the incident as soon as possible;
  • Examine the area for security risk factors associated with the incident;
  • Determine the cause of the incident;
  • Take corrective action to prevent the incident from recurring; and
  • Record your findings and keep a record of corrective actions taken.

We have a responsibility to ourselves, our customers and other members of the public in general to reduce hazardous exposures wherever possible.

We need to remain vigilant about the safety of others and ourselves as well as the safety of the equipment we use.

Insurance adds a sense of security
When you have done your best to avoid or reduce the hazards that threaten the security of your business, you will still have uncertainties that will affect the sense of well being you are seeking. Insurance can help to fill that gap.

The areas where insurance seems to work best in this scenario are all related to financial catastrophes which may affect your ability to continue in business. They include:

  • Property risks;
  • Liability risks; and
  • Loss of income

Working with an insurance professional, you will be able to identify the values at risk for buildings, business personal property, machinery and equipment.

Third party loss
It will be more difficult to determine the amount at risk for a liability loss. Neither you nor your insurance professional can be certain what a third party might demand in payment for real or imagined damages.

Because of this difficulty, you will want to purchase as much coverage as you can afford.

Ask your insurance agent what higher limits of primary coverage or an umbrella will cost; you may be surprised to learn how small the increase in premium will be.

Don’t give up too much for too little especially when purchasing liability insurance because of the difficulty of determining how much coverage is enough.

Loss of income
As to the loss of income, you will want to look at your own financial position. What is the amount of income you would lose if your business were interrupted as a result of physical damage?

Be sure to include both the real and personal property you use at your wash. You should look at the worst possible situation and ask yourself these questions:

  • How long would it take for me to get my carwash up and running again if a loss was to only my property?
  • How long would it take for me to get back into business if I have to wait to find a contractor because of widespread damage in my entire trade area?
  • What time of year do I receive the largest part of my income?
  • How long will it take to make repairs?
  • What is the most you could lose during that time period?

These questions will give you an idea of the potential maximum possible loss.

Set your mind at ease
Finally, as to the security of your business and the use of insurance as a part of your business plan, keep a positive attitude about your ability to make a difference. Watch for changes that might affect your preparedness.

Review your plans at least annually. Be sensitive to your surroundings.

Pay attention to what you observe and be ready to make adjustments to offset any adverse conditions.

Yes, Webster, was right when he defined security. By applying just a few common sense actions and working with your insurance professional to create the most cost effective security blanket for your business, you can reap "A good night’s sleep" regarding the well being of your business.

Scott Brothers is president and CEO of Joplin, MO-based, The Insurancenter, which has been serving the car wash industry since 1986.

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