Why do I need Car and Vehicle Accessory Business Insurance?
Whether you are selling Spark Plugs in Spalding, Manufacturing Car Mats in Mablethorpe, or running your Online car accessory business from… ok you get the idea. The car accessory market is huge and very diverse, whether your business is online retail, you manufacture, or you import or export, having the right type of Car Accessory Business Insurance in place is essential.
Being such a diverse sector even the single product lines for serving motorists can be big business, but whether you are a big business, or just you’re starting out on your business journey insurance is one of those things you will find are necessary. Supplying accessories to the car owner can of course come with its risks, and even with the best protections in quality control or manufacture, the unfortunate can and do sometimes happen, insurance is there to protect you and your business.
What is Car Accessory Business Insurance?
Insurance for a Car Accessory business can provide a wide spectrum of insurance protections whether you work from an office selling car parts online, you have premises where you hold stock, or a high street car accessory business your exposures could be wide-ranging particularly from a storm, flood, as well as fire perspective. Theft can obviously be a risk with car parts as you could have high-value items such as specialist performance components.
Sometimes depending on the types of accessories you sell, it can sometimes prove difficult to find insurance, particularly when it comes to Liability Insurance, safety-critical car parts are a typical example so it’s important that you are dealing with a broker that not only knows and understands the type of parts that you are selling but the insurance markets that will insure your vehicle accessory business.
Insurance for a those selling, distributing or importing is worlds apart from someone that is manufacturing parts for cars. Even the simplest of products can still be a challenge just because they are going in or on a vehicle. With many components and accessories for cars such as lighting, alloy wheels, as well as body panels coming from the far east putting together correct covers, can at times present a problem.
Depending on whether your business imports, holds stock, distributes car accessories, or just sells them, you might even be a motor factor, usually, premises are required. Not only is cover required for your stock, but your stock management systems or if you retail your EPOS systems, all these types of cover can be brought together either under a package insurance policy or a policy that allows bespoke covers so you are only buying cover that you really need.
Unfortunately, claims can happen at the business premises, this might cause minimal damage or it could be worse considerable damage could be causing your business to close for some time. If you have a material loss at your premises, essential cover such as business interruption is there to help you through the period, keeping your business “in business” whilst the premises are rebuilt or repaired.
What types of cover might a Car Accessory Business need?
Because the industry is so vast not one business insurance policy fits all, many of the covers are however very similar. Of course, Liability insurance is one of the key areas, Product Liability for car accessory businesses is essential but it also comes packaged with Public Liability, another business protection.
Public Liability for any business will cover you against allegations of negligence to the public, and just like product liability will provide defence costs, as well as any compensatory awards that might be made against you, or your business up to the limit of indemnity of the policy.
The limit of indemnity simply means the financial or monetary limit the insurer will pay up to, common limits of indemnity are £1million, £2million, £5million, and upwards depending on your needs.
Public Liability for your vehicle accessory business provides protection for allegations of loss, this might be a member of the public coming to your business premises and having an accident, falling over a palet for instance or slipping on your reception floor. Similarly if you deliver to a customer, whilst at the premises you know over their priceless ming vase, you get the idea.
Depending on your insurance requirements, Liability insurance can be bought as combined liability insurance, or where property cover is required such as your stock or fixtures and fittings then a retailer package or commercial combined insurance is available.
Employing people generally means that by law you will require Employers Liability Insurance, this is usually a standard amount of £10million, it can be added to any of the above policies, and just like other liability covers it protects you or your business against allegations where your employee could have been injured whilst carrying out work for you.
Property Insurance Usually a car or vehicle accessory business will have business premises, these may be a retail accessory shop, an industrial type unit, or where you manufacture accessories or hold stock as an importer and distributor.
Property insurance will cover the building if you own it or where it’s your responsibility to insure it. Your business stock needs to be considered as this is likely to be the single largest expense considering the value of certain accessories or specialist equipment for fitting to cars, body kits, and exhaust systems, and similar. Your racking and storage area, your systems and their controls such as electronic business machines which hold all the key stock information, all need to be considered and protected.
Goods in Transit Insurance
How do you deliver your products to customers? If your business is local you might have your own vehicles, for most though using a courier service to send your products to your customers can be a far more cost-effective solution.
Insurance is available for businesses in this sector, it covers the accessories if you deliver them yourself or whether you use the services of a parcel delivery or carrier specialist.
Sending your products out the country? You might wish to consider Marine insurance, this will cover your accessories from your premises to your customer’s location, whether you send by boat or by air.
Importing accessories for cars may be part or all of your business, your supplier might be covering the cost of shipping or you might buy directly from the manufacture overseas and arrange transport yourself to get your products to your business.
Marine insurance will cover your business whether you are an importer or an exporter of car or vehicle accessories.
Legal Expenses Insurance
Sometimes this type of cover is included in a business insurance policy, or they can be purchased as a stand-alone product. They provide your business with essential protection** such as Employment Disputes, HMRC and VAT Investigations, Contract disputes amongst other covers which are perfect for a any business who may have issues with suppliers (usually for the UK only). Business legal advice and business templates to use in your car accessory business are standard on most policies.
** To be successful a business must have a 51% chance of success before the policy will provide legal defense. This is called a prospect of success clause.
It’s not “if” it will happen but when, it’s estimated that over 60% of businesses suffer from some form of Cyberattack each year. A car or vehicle accessory business is not immune, they can attack the very systems that are the lifeblood of your business. This can be from ransomware attacks to social engineering, to cybercrime where the cybercriminals change documents such as invoices.
Directors & Officers Liability
Not just for big business, a company’s liability is limited, the directors of that company have no such protection and therefore have unlimited liability. A Directors & Officers policy will protect company directors, and the corporate body against allegations of committing a wrongful act.