Garage Liability provides an important firewall in the protection of a Franchise Dealership’s assets and in preserving the dealership’s ability to continue serving its valued customers. This insurance shields dealer assets against legal liability, specifically for claims of bodily injury (BI) and property damage (PD) arising out of the dealership’s business operations. This coverage deals with garage operations involving the ownership, maintenance, or use of autos, as well as with all other “Garage” operations.
ERRORS AND OMISSIONS
Errors and Omissions coverage protects a franchise dealer against damages caused by negligent acts, and errors or omissions in the performance of its professional duties; including in the sale of a vehicle, in failing to comply with any Federal, State or Local statutes or regulation in matters related to Title, Odometer, Prior Damage or Truth in Lending or Leasing. Generally, such policies are designed to cover financial losses rather than liability for bodily injury (BI) and property damage (PD).
EMPLOYMENT PRACTICES LIABILITY
Employment Practices Liability (EPL) provides another critical layer of insurance protecting the Franchise Dealership assets and its continuing business operations. EPL typically includes coverage for liability arising from discrimination, wrongful termination and sexual harassment; but is often endorsed to include other common workplace torts. These can include alleged offenses against customers or vendors, as well as for alleged violations of Federal, State or Local laws pertaining to wage-and-hour or immigration issues. The policy can also be endorsed to stipulate the Franchise Dealer’s preferred choice of legal representation.
AUTO INVENTORY COVERAGE
In addition to covering the dealership’s inventory for losses due to collision and non-collision losses such as theft and fire, Auto Inventory - or Dealers Physical Damage – insurance is endorsed to cover a variety of dealer-specific losses. This can include protection against losses from False Pretense (a voluntary parting of the vehicle by trick or scheme), Government Confiscation (seizure of a vehicle as evidence in a crime) and Diminished Value (damage to a new vehicle). This coverage should also be evaluated for deductibles, exclusions (flood, earthquake, etc.) and for compatibility with similar coverage carried through flooring companies.
A Franchise Dealership’s reputation is founded upon strong customer loyalty built by constant attention to customer relationships, and Garage Keepers insurance plays an important role in protecting those relationships. In the event that a customer car is damaged while left in the Dealership’s care for service or repair, this insurance will cover repairs to the customer’s vehicle and do so regardless of fault and without involving the customer’s own insurance carrier. This coverage should also be carefully evaluated for deductibles, exclusions and reimbursement terms should the Dealership perform those repairs on a customer vehicle.
The buildings that house a dealer’s operations are vital to its success and Real Property Insurance – or building coverage - provides for repairs to, or replacement of, those buildings. The coverage can be endorsed to included coverage for the extra costs associated with building ordinances enacted since the structure was originally built. Such coverage would, for example, pay for the loss, and cost of tearing down, a building that, though only partially destroyed by a covered loss, could not be repaired because of current local building laws. Building coverage could also be endorsed to provide additional monies required to comply with new building codes required for reconstruction.
BUSINESS PERSONAL PROPERTY
Business Personal Property – or Contents - insurance includes coverage for all of a dealership’s furniture, fixtures, machinery, equipment and merchandise held for sale (such as auto parts, but not vehicle inventory – which is discussed under Auto Inventory Coverage). The coverage also includes Tenant Improvements made to the building. A separate, but related, coverage that is often recommended for dealerships is Personal Property of Others, which includes the loss of employee tools to theft or other covered loss. And, the policy can be designed to include appropriate levels of coverage for losses to account receivables, valuable papers, or losses from various types of crime.
For a Franchise Dealership that is shut down over an extended period of time because of a covered loss, this valuable coverage protects the Dealership’s assets - and its ability to recover - by paying for continuing expenses such as payroll, rent and interest, as well as net income. The coverage can be endorsed to included “Extra Expense” for additional costs incurred as a result of the loss; such as rent for a temporary location, money to secure replacement inventory, or to pay for special advertising.
The various and valuable assets of a Franchise Dealer are exposed to a multitude of criminal threats, including theft, fraud, embezzlement, and dishonesty of every stripe. These crime exposures may arise from either inside and outside the dealership organization. Crime coverage provides an important shield against losses from employee dishonesty, forgery, counterfeit securities, and the disappearance of cash. And, damages from electronic crimes such computer fraud and unauthorized electronic funds transfers can also be protected against with crime coverage.
Tank Pollution Liability provides protection for liability from pollution spills and contamination and is another important level of protection for a Franchise Dealership’s assets and continuing operations. Liability for oil, anti-freeze, transmission fluids and other pollutants held in Dealership’s storage tanks (above ground and under ground) is now mostly excluded by the general, auto, and umbrella liability policies they acquire. Dealerships must now obtain a separate policy to protect against liability for pollution, which can arise from occurrences on dealership property, while pollutants are being transported by waste haulers, or at the waste sites where pollutants are dumped.
A dealer's basic liability policy provides a critical firewall of protection for dealership assets, but a commercial umbrella policy adds a vital and substantial layer of additional protection. High limits of commercial liability are written with an umbrella policy to raise the limits of the dealership's underlying primary liability policy. Not only does the umbrella policy respond to claims involving bodily injury, property damage, and personal injury (such as auto accidents, slip-and-fall, customer complaint, libel, slander and invasion of privacy) but the umbrella policy will usually provide additional limits to the underlying workers compensation policy.