If you are interested in owning a car dealership, in addition to getting the right business license and inventory, you need to make sure you invest in the right insurance as well. Having the right insurance is necessary if you want to protect the used car dealership you are building.
Dealer's Lot Coverage
The first type of insurance you need is a dealer's lot coverage. Dealer's lot coverage is designed to protect vehicles as they sit on your lot. You need to have all your cars covered. Dealer's lot coverage will protect your vehicles if they are in an accident when someone test-drives the vehicle or when they are sitting on the lot. If a fire were to sweep through your lot and damage your vehicles, they would be covered. Or if someone were to take a vehicle on a test drive and never return, your dealer's lot coverage would have you covered.
Garage Liability Coverage
Next, you need garage liability coverage, which provides you with liability coverage for both property damage to third parties as well as bodily injury. This type of coverage will also protect your customer's vehicles, which you do not own if they leave them on your lot while test-driving a car. This coverage, if you also run a small repair shop at the same time, will protect your customer's car if they leave it with you overnight for repair work or an assessment of value.
E & O Insurance
E & O insurance protects you from mistakes that can be made during the business process. With a used car dealership, E & O coverage will protect you if you or a salesperson fills out either a title or financing form incorrectly. You will have legal backup if you make a business error on the paperwork that could hurt you or your clients.
As a business, you should always have property insurance. Property insurance protects the actual lot and buildings that are on your car lot. For example, if your dealership building is broken into, property insurance would cover it.
General Liability Coverage
Finally, it is a good idea to have some general liability coverage. This type of coverage will protect you from all the ways that you could get sued as a business, from someone slipping and falling in your parking lot to a worker getting injured.
As a used car dealership owner, you need some very specific types of insurance that are made just for your industry, such as dealer's lot coverage and garage liability coverage. You also need more general business insurance policies, such as E & O insurance, property insurance, and general liability insurance. This is not an exhaustive list; be sure to talk to insurance agents at a company like United Counties Insurance Group about other types of protection you may need.