Once you get your auto detailing company legally created, you will want get insurance. You don't want to be detailing cars without insurance, the risk of accidentally burning the paint on a Ferrari or having that one customer blame you for damage (this is why the auto detailing inspection form is crucial), being protected is of utmost importance.
Having insurance for your auto detailing business is actually not as terrible as it sounds. The cost is surprisingly affordable, depending on how much coverage you elect for and depending on your location, it will cost around $1000-$2000 a year.
If you are a mobile detailer you also need to take that into account since you are driving to the location, moving the customer's car, setting up your tent, etc. You also want to protect your equipment in your car/van from damage or theft.
It may be easy to skip out on getting insurance when you first start out, you do not want to risk this. When you are a new detailer you are less experienced and just learning. Going without insurance while still learning could cause a catastrophic incident and end your business before you really can get started.
Liability insurance protects you if you get sued because of accidental negligence. For example, if you accidentally burn through the paint or crack the windshield of your clients’ Mercedes, liability insurance will cover you.
Mobile Detailers can get just General Liability Insurance. This will cover your business related incidents that cause bodily injury and property damage. If your dual-action polisher backing plate flies off and shatters a window you will be covered.
Garage Keeper’s Insurance
Garage Keeper’s Liability insurance is applicable for all auto detailers. This protects against damage to your customers’ car while it is in your possession. This would include during garage operations, collision damage to the car while you are moving it or driving it back to them, damage to non-customer vehicles if you get into an accident while driving the customers car, and customer injuries at your place of business.
You will want to be careful with submitting a claim for something that is minor that could significantly raise your rates. If you have a great driving record and no claims it could be around $120 a month for this coverage.
Building insurance is recommended for those with a fixed shop location. This will protect your building and the contents in case of loss due to fire, a burst water pipe, or anything else you don’t want to occur.
Business Interruption Insurance
Business interruption insurance is if you are unable to work and have a loss of income due to a catastrophe like a fire in your shop. It can also cover the cost if you need to have a temporary location and rent somewhere until your shop is repaired.
Business Owners Policy
Another great option for fixed-shop detailers is to get a Business Owners Policy (BOP). A BOP will include property insurance for buildings and contents within, business interruption insurance, and liability protection. This is a convenient option because it is a bundle of all three that I would recommend you get.
If you have employees working for you, you will need to get workers compensation insurance. Most states actually require you to carry this insurance even if you do not have detailers working under you.
This will provide pay and medical benefits to your employee who might be injured while working on the job. This will cover any injury or illness that could occur from working as an auto detailer at your business. The National Federation of Independent Business has a good article detailing the state by state rules here.
Most insurance companies have bundle policies specifically catered to the automotive industry. When you are talking with them, make sure you mention you want your equipment and tools covered as well, the last thing you want is for your $800 steamer damaged in a fire, burned out, or even stolen out of your truck. Without your tools you will become less efficient during your detailing process and potentially losing precious time and money.
When you are contacting insurance companies you will want to make sure you are classified as “auto laundry” so you are not accidentally filed under “auto repair” which would have higher premiums. You can contact your existing insurance company or any of the other major insurance companies for your automotive business insurance coverage. Keep serving, growing and learning.