Business Insurance for Car Washes and Auto Detailers

General liability insurance excludes coverage for items in your care, custody, or control—including your customers' vehicles. It also won't cover hazardous worksites like your garage.

Fortunately, there are two policies you can buy to cover these exclusions:

• Garage keepers insurance covers damage to customer vehicles caused by fire, theft, vandalism, or collisions that occur while moving a car. It also covers accidental dents or scratches that happen during a car wash or detailing.
• Garage liability insurance extends the protection of general liability insurance to your business's garage. If a customer slips in a puddle of soapy water, this policy will pay for any medical bills or repair costs, such as a smartphone that breaks in the fall.

Car washes and auto detailing businesses often invest in additional insurance policies as part of a comprehensive risk management plan.

Here are some other types of coverage to consider:

• Product liability insurance: This policy is also called products-completed operations insurance. It covers damages caused by a product or completed service, such as a customer who has an allergic reaction to a harsh cleaning agent.
• Errors and omissions insurance (E&O): E&O insurance covers legal costs if your business is sued for negligence, such as damage to a customer's car caused by pressure washing on a setting too high. It's sometimes referred to as professional liability insurance.
• Business interruption insurance: A business interruption policy covers lost income and operating costs if your business is forced to close temporarily due to a fire or extreme weather. It's also called business income insurance.
• Equipment breakdown coverage: This policy covers financial losses if a piece of equipment that’s crucial to your car wash operations or auto detail shop fails or malfunctions.
• Business personal property (BPP) coverage: BPP insurance covers vacuum cleaners, pressure washers, and other items kept at your main business address. You can add it as a rider to your general liability policy.
• Tools and equipment insurance: This policy covers your car cleaning equipment wherever you take it, including in transit or stored off-site. It's a key policy for mobile car washes and detailers.
• Commercial crime insurance: Crime insurance comes in several forms. You can buy it with your commercial property insurance or BOP to protect against crimes committed against your business, or you can buy a fidelity bond to reimburse customers in the event of employee theft.
• Employment practices liability insurance (EPLI): An EPLI policy pays for legal costs related to violations of an employee's rights, such as an accusation of discrimination or unfair termination.

The policies recommended for car washes and detailers apply to mobile businesses as well. In addition, there are a couple of key policies that mobile detailing businesses and car washes should carry:

• Commercial auto insurance is required by law for business-owned vehicles, such as a mobile detailing van. Personal auto insurance won't cover work-related driving, which is another reason you may need this coverage.
• Inland marine insurance, also called tools and equipment insurance, covers your carpet cleaners, paint polishers, and other business equipment you bring to your customers' homes and offices. It's needed because commercial property insurance only covers items at your main business location.

Here are four ways to lower costs on your auto detailing business insurance or car wash insurance policies:

1. Pay the full annual premium. Insurance companies usually offer a discount when you pay the full annual premium, as opposed to monthly payments.
2. Bundle policies for a discount. Small business owners can often bundle insurance policies to save money. The most popular option is a business owner's policy, which bundles general liability coverage and commercial property coverage.
3. Reduce your risks. By focusing on workplace safety, it's possible to avoid incidents and claims—which helps keep your premiums low.
4. Customize your policies. You can choose lower limits or higher deductibles to lower your policy premiums, or opt out of expensive coverage options like comprehensive insurance.