Everything You Need To Know About Car Wash Insurance For Your Business

Over 72% of drivers use professional car wash services in the US. Demand for this service is underscored by consumers who lead busy lifestyles, making it increasingly difficult for home washing. As a response, car wash companies have been opening at a higher number of locations and providing additional services.

However, volatile factors such as rising inflation rates and unforeseen accidents can incur significant losses for these businesses. Our previous post Surviving Economic Turmoil, A Guide for Car Wash Operators even showed that 85% of small business owners say they’re concerned about the impact of inflation on their business. While there are several ways to circumvent inflation, such as increasing wash prices or reducing operating costs, protection from workplace mishaps is also equally crucial.

car using automatic car wash
Image Credit: Pexels

What is protected by car wash insurance?

Among 72% of drivers who utilize professional cleaning services, a conveyor car wash is the most frequently available option. Here, vehicles are essentially placed on a motorized track and dragged through a tunnel where they’re rinsed, soaped up, washed, and waxed. Though there’s no direct interaction between a customer and an employee in a self-service car wash, machine malfunction can result in stressful accidents.

In terms of a full-service car wash, this necessitates services done by hand. Supplies like sponges are used, but the employee can also fulfill vehicle inspections, oil changes, and repairs. Car wash insurance can cover undesirable outcomes from either type of car wash service. In the next point, we’ll discuss insurance more extensively.

Which types of insurance can car wash businesses get?

Below, we’ve listed the three most critical insurance types you should secure to minimize workplace risks and smoothen overall operations:

Business owner’s policy (BOP)

This policy covers business property and business liability insurance. BOP insurance helps resolve claims that result from fire or theft. This insurance addresses bodily injury and property damage as well. Since car wash services have physical locations, there’s a possibility that assets can get stolen or damaged. Equipment can break down and lead to steep repair or replacement costs. With BOP, you would have support amidst repair fees or new installations, and service disruptions can also be minimized.

car wash insurance salesman

Car liability insurance

Despite stringent policies that prevent damage to customers’ cars, accidents can still occur, either due to untrained employees or machine malfunctions. Car liability insurance ensures that your business is more equipped to handle potential issues. Sound Dollar defines car liability insurance as a means to help a business cope with costs after an accident. Property damage liability, specifically, can cover a bent antenna, broken mirror, damaged wiper, and significant dents or condition issues. Legal defense is also available if a disgruntled customer decides to sue and your insurance company shoulders the costs.

Workers’ compensation insurance

In 2020, there were 4,764 fatal occupational injuries recorded in the US. It’s not only important to bolster job safety protections and enforcement, but car wash businesses should also have a workers’ compensation insurance policy in place—this type of insurance functions as a contract between an insurance company and your business. Lost wages, medical bills, permanent disability, and even death are paid in case an employee suffers an injury. With Texas as the exemption, all states require operating businesses to have this insurance coverage.

What happens when both a car and the car wash are damaged?

One thing to remember is that even though a customer has signed a liability waiver, it can be disregarded based on the level of negligence (as in operating with faulty equipment) or state laws. In some state laws, if two parties are involved in a car accident, it’s up to the insurers to place fault. This is called comparative negligence, and insurance companies litigate to ensure they’re only liable for damages your business has caused. When both a car and the car wash are damaged, insurers can set blame based on a percentage basis. Generally, this basis is 70/30. If total accident costs stand at $10,000, and your business is 30% at fault, you’ll be paying $3,000.

Otherwise, contributory negligence states that if both parties are equally accountable, they can cover their own fees. Ultimately, state laws will determine how much you should pay if your car wash establishment and the car are negatively affected.

Photo of writer Jenelle Brickman

Jenelle Brickman is a freelance writer whose interests lie in current economic trends. She strongly believes that everyone should have access to sound financial advice. When she isn’t researching on her next article, she enjoys going to the beach and hiking through nature trails.

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