There are a number of issues the carwash owner faces when looking to secure insurance. To address all of these issues in this article is not feasible. However, there are a few primary issues you should be aware of as a carwash owner that will hopefully help you to eliminate the chance of loss.
Start by taking an inventory of your carwash’s tangible assets. To help facilitate this process first take a look at your financial statement or tax return to see if there is an existing list, and secondly, make a list of the property you own or use in your business.
On this list, include:
- The description of the item;
- Information regarding the acquisition price;
- Date of purchase;
- Cost at time of purchase; and
- Cost to replace these assets at today’s prices.
For example, you would write: “Building, built 1995, non-combustible, 2,000 square feet, cost $70,000, contractor’s estimate to rebuild today, $206,500”; or, “Beginning inventory 01/01/08, cost of merchandise, sales, ending inventory 12/31/08.”
Even though it takes time to accumulate this information, in the event of a loss it saves time and money when you’ll be required to provide information to validate your proof of loss. It’s critical that you store this information in a safe place and away from your premises so you can access it when you need it most — after a loss.
When it’s your fault
The second area of risk is much more difficult to manage, your legal liability to others for bodily injury and/or property damage that is incurred as result of your ownership, maintenance or use of property and your operations. You may find yourself in a lawsuit alleging something you or your employees on your behalf did (or did not do). You will not always be found responsible for the damages, but you will need to be able to defend yourself in a court of law.
You cannot predict the value of damages. Therefore, it’s imperative that you do your best to help prevent injury and/or property damage in the first place, and in addition, purchase adequate limits of liability insurance to protect yourself from financial disaster.
How much liability coverage is adequate? The simple solution is to purchase as much as you can possibly afford. In today’s litigious society, judgments in excess of $1,000,000 are common in almost every geographical location.
Pay particular attention to…
When working to reduce the chance of loss from legal liability, these are some areas in the carwash business, and especially the full service carwash, you need to pay particular attention.
Slip and fall injuries are some of the most common events. Because there is water and floor surfaces are often made of vinyl, tile, or stone, they become hazardous when there is foot traffic from the areas where the washing is actually being done. You can eliminate some of this by posting signs and enforcing rules which eliminate customers from being put into a situation where they are in the wash area. Employees should be required to have footwear that has slip resistance.
Employee operation of customer vehicles is another area you should enforce strict safety rules. There is considerable employee turnover in many carwashes. This creates a potentially dangerous situation. Always check driving records of any employee who will ever move a vehicle belonging to customers. It has been our experience that many of the vehicles that are serviced by the full serve carwash industry are upper-end units (i.e. BMWs, Cadillacs, etc.). Most of the accidents are low speed, low impact events, but the damages often run into thousands of dollars. It makes good business sense to provide safety training for your employees on how to operate various types of vehicles, emphasizing how to operate a standard transmission versus automatic transmission, where to find safety equipment on various vehicles, and any other issues that concern the safety of your employees and your customers.
Proper maintenance of equipment and diligence in selecting the products used in your business can also eliminate damages. Be sure that the equipment will perform the task at hand without unnecessary damage to the vehicle. For example, a brush that has sharp edges from wear may scratch the surface of the paint job. Or, cleaning products that have set on a shelf for a long time may damage the surface if it has solidified or a chemical reaction
has set in that produces other than the desired results.
Virtually everything we do in life has some degree of risk involved, and no one knows this better than the business owner. With prior planning and preparation, the chances of loss can be reduced significantly.
Scott Brothers is president and CEO of Joplin, Missouri-based The Insurancenter. The Insurancenter has been insuring the car care industry since 1986, and is the largest writer of carwash insurance nationwide.