Insurance coverage explained

Insurance coverage explained

A review of several insurance options you may need to protect your business.

Since I first entered the insurance industry 15 years ago, I wanted to make a difference by not only helping clients get the best coverage for their money, but also by changing the insurance industry for the better. I can relate to professional carwash businesses as I come from a family of carwash owners. I saw firsthand the struggles that my family’s business experienced on a day-to-day basis in relation to management, claims, insurance and more. It is my passion to help business owners understand their insurance policies and coverages in detail. 

For this article, I am outlining a few important insurance coverages to consider when you are either building or buying a carwash operation. It is important to keep these insurance options in mind in order to protect your business from being affected by any unforeseen incidents. Some of these may or may not be applicable to your current carwash so it’s important to work with a trusted insurance agent to select the right coverage as well as options for your particular wash or locations. 

Builders risk

It is well-known that the carwash industry has continued a phase of widespread building of new locations throughout the U.S. So, who really needs builder’s risk insurance coverage? 

Any person, business or company with financial interest in the construction of a carwash project needs builder’s risk insurance. The property owner, contractor and any subcontractors as well as the lender are candidates for builder’s risk insurance. 

Workers’ compensation

Workers’ compensation insurance is designed to protect your business and its employees. With this coverage, it provides wage replacement and medical benefits to employees who get injured in the course of a job. For employers, this means an exchange for mandatory relinquishment of the employee’s right to sue your business for negligence.

Every state has specific requirements regarding whether or not an operation is required to carry coverage. In the state of Missouri, you are required to carry workers’ compensation insurance if you have five or more employees. In Texas, strangely enough, employers are not required to offer workers’ compensation, nonetheless, we always recommend this insurance option to all of our customers. It is well worth the peace of mind for the cost.

Even if your state does not require that you carry workers’ compensation, if an employee is injured on the job, you would most likely be held liable for their lost wages and medical benefits. For the relatively low cost of this coverage, it is recommended to obtain coverage even if it is not mandated by your state.

General liability insurance

General liability insurance protects your business from liability lawsuits arising from negligence that may cause injury to others, including customers. General liability also protects your company if someone is injured using your product or service or while on your premises.

For example, if you own a self-serve carwash and a customer is injured while using the wand sprayer, your carwash could be held liable for all injuries — thus, carrying general liability is very important.  

General liability can pay for things like the related injury’s medical expenses, property damage as well as any personal lawsuits filed by the customer. When you consider that legal expenses, settlements or judgment expenses of a single lawsuit could drive your business to bankruptcy, you will see why this type of insurance is considered a “must-have.”

These are just a few of the important  coverages to think about adding to your insurance policy if you don’t already have them. There are many more coverages that are specific to carwash businesses. 

It is important to make sure you review your policy coverages often. In fact, we recommend having an annual renewal review with your current insurance agent as a best practice. Happy washing.

Melissa Pirkey is the carwash division vice president and vertical leader of Assured Partners/Midlothian Insurance.

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