General Liability Insurance Business Considered : Not long ago, I got an email from a man who wanted to set up an auto oil change business in Florida. He was worried about what kind of insurance he might need and got the impression that a $1 million commercial liability policy was needed on top of his work truck commercial car policy. Okay so, let’s talk about this; is he right?
It turns out that he is the most convinced, you see a commercial car is not the same as a completed operation or a potential liability at work. For example, if a car catches fire that you’re working on, your commercial car policy won’t cover it. Do you see the point? So here’s the advice I explained to him;
You may want to get a commercial insurance policy; Aggregate $1 million, general liability 300k per incident, with the notation “garage keeper liability”, and there will be some customers who may demand more, and also demand additional insurance, not just a registered insurance certificate.
Commercial Vehicle Insurance is another requirement, but most commercial business policies will list them together as one. Find a good “commercial insurance broker” and ask them to find out the source, usually the brokerage agent knows the underwriter very well (as in speed dial) and can give you a good rate and the underwriter will understand the difference between mobile and fixed charges. Generally commercial liability insurance is based in part on your estimated gross income.
Don’t overestimate or you’ll pay too much, and don’t underestimate or you might get audited by the insurance company or they might decide you’re not worth the risk. Believe it or not, most commercial insurance policies have a clause in their insurance contract that they can audit you and by signing the policy, you consent to the audit beforehand.
So, it is not wise to falsify or disparage information. If you find that you may have underestimated you need to contact your broker and explain that, sometimes they will increase the premium, sometimes up to next year’s estimated gross sales.
Well, Florida is a great market for cell phone oil changes, however, don’t forget there is some competition there, some that have actually been going on for 25+ years and as such, insurance is just one aspect or information to consider. before starting this type of business. Please consider all this and think about it, and develop a solid business plan.