Garage Auto Insurance Program for Car Dealerships

Business insurance is an investment in the future of your business, whether you own an ice cream shop or a car dealership, you need business insurance. It is important to know how to choose the right policy for your dealership. Keep reading to learn all there is to know about car dealership insurance in Ontario.

What does car dealership insurance cover?

Car dealership insurance policies are specialty business policies, standard across the province of Ontario. A car dealership (or a garage) must carry a garage auto insurance policy and a separate commercial general liability policy to operate. Both of these are important elements of any dealership’s risk management strategy, as it can protect you against all kinds of business liabilities. The coverages for car dealership insurance policies include third party liability, direct compensation property damage, loss of or damage to owned automobiles and liability for damage to a customer’s automobile while in the care, custody or control of the applicant.

Car dealership insurance offers protection for the vehicles on the lot, the licence plates, personally used vehicles and people driving the vehicles. Included in car dealership insurance is protection for the vehicles on the lot. If a covered peril, such as theft, hail, or vandalism were to occur, this policy may respond to cover for the damages. This is different from a liability policy that would protect against lawsuits or bodily injury on site. This policy is influenced by factors pertaining to the specific business, based on their years in business, garage location, the coverages and limits chosen as well as their inventory value.

Below the business insurance experts have provided an outline of the most important types of insurance coverage for car dealerships:

Garage auto liability insurance

Car dealership owners will quickly realize that commercial general liability (CGL) insurance is a key element of nearly every business insurance policy. It can protect your car dealership against claims of third-party property damage or bodily injury and property damage. Under this portion of your policy, your insurer may compensate you for legal fees like settlement and defence fees, as well as other applicable costs, such as medical expenses. Given how expensive lawsuits can be, having this type of liability coverage is important, especially given that car dealerships frequently have customers visiting them in person.

Garage property insurance

Commercial property insurance is a must if you want to protect the physical space your dealership operates within, along with your expensive inventory and stock, from property damage. Along with commercial general liability insurance, commercial property insurance is another type of coverage you will find in most business insurance policies. It is especially important for car dealerships given the fact that most of them have physical retail spaces, as well as high-value inventory. When you add commercial property insurance to your policy, you will need to select perils to include with it. You will then be protected if damage results from these insured perils. Examples of common insured perils include fire, theft, vandalism, and water damage.

Additional optional coverages for car dealerships

Other insurance coverages include:

Product liability insurance

Product liability insurance is another important type of coverage for car dealerships, and it is a subset of commercial general liability insurance. This type of insurance is important for any business that sells products to customers, and such products include cars. Even if the car you sold was manufactured elsewhere, if it causes bodily harm or alleged bodily harm or injury to a customer or damages their personal property, you could still be held liable. Again, lawsuits can be expensive, even if the dealership is not held liable, which is what makes product liability insurance so important. But with this type of coverage in your car dealership insurance policy, your insurer would likely cover the costs.

Cyber liability insurance

Cyber insurance for businesses is crucial, and that includes car dealerships. Chances are your car dealership stores sensitive customer information online, whether that be personal information or financial information. As such, you have a legal responsibility to keep that information secure, but accidents happen. For example, your car dealership’s online system could fall victim to a cyber-attack, hack, or data breach. Without cyber insurance, you would be on the hook for covering the costs of a cyber-attack on your own. But with insurance, your insurer can help pay for everything from legal fees if a customer files a lawsuit against you relating to the loss of data to customer notification fees.

Crime insurance

Crime insurance is important for any business owner who wants to be protected against customer crimes. With this coverage added on to your garage auto policy, you will be compensated if you are the victim of a customer crime, an employee theft or burglary of monetary value, or customer fraud with forged cheques or credit cards. Business interruption coverage Business interruption insurance may be incorporated into your commercial property insurance coverage. It can compensate your car dealership if it is forced to temporarily close due to damage caused by an insured peril. Specifically, it can cover income lost due to the closure, including employee wages. A reminder that for business interruption coverage to come into play, the damage must have resulted from a named peril in your commercial property insurance policy.

Equipment breakdown insurance

Equipment breakdown insurance can be added to car dealership insurance policies if you want the peace of mind of knowing that if a piece of equipment in your dealership suffers a mechanical or internal failure, you will be protected. This is especially important for car dealerships that have repair shop or auto body shops on-site, as auto body shops often use various types of equipment to complete repairs. With equipment breakdown insurance, your insurer would help pay for the cost of repairing or replacing a piece of broken equipment. You might even receive compensation for any business lost due to the equipment breakdown.

If you are unsure what types of insurance coverage to purchase for your car dealership, contact BrokerLink today. A BrokerLink insurance advisor would be pleased to walk you through your options and find you a customized policy.

How to find a great insurance policy for your garage

Finding the right coverage for your car dealership just got easier thanks to BrokerLink. Follow the expert-approved tips below, and we guarantee that you’ll find a great commercial insurance policy in no time:

Shop around for coverage

Shopping around and comparing your options is a central part of buying insurance. It is the only way to ensure you find the best possible policy at the lowest possible price. The good news is that if you don’t have time to do this yourself, you can ask a broker for help. Brokers are licenced insurance experts who help customers find ideal coverage by contacting different insurance companies in Canada, obtaining quotes, and comparing them while you don’t even have to lift a finger.

However, it is important to understand that there are not many companies that offer car dealership insurance, therefore it may be wise to stay with the same broker or ask your broker what you can do to obtain a better rate on your policy.

For a better idea of how much a business insurance policy will cost for your car dealership, contact BrokerLink today. Through a trusted insurance broker like us, you can obtain a free car dealership insurance quote with ease. A BrokerLink insurance advisor will inform you about what information you need to provide to receive a free quote and then can direct you to our online quote tool. You can also request a free commercial insurance quote over the phone or by visiting us in person at one of our 200+ physical locations in Canada. Be prepared to answer some questions about the size and scope of your car dealership, as well as the types of coverage you are looking for. This allows brokers to get the most cost-effective and fitting policy for your needs. Note that all BrokerLink insurance quotes aim to be as accurate and competitive as possible and are also entirely obligation-free.

Work with a licenced insurance broker

By working with a licenced insurance broker, you gain access to an entire team of insurance professionals, many of whom have commercial insurance expertise. Upon getting in touch, you will be assigned a dedicated commercial insurance specialist who will ask you questions about your car dealership, insurance needs, and budgets in order to find you a personalized insurance policy.

Review your coverage every year

Things change, and insurance should change with them. This is especially true of businesses like used car dealerships, which are constantly changing and growing. If you want your insurance policy to keep pace with the growth of your business, you need to review it before it expires. Otherwise, you run the risk of letting it automatically renew, which could mean paying for coverage you no longer need. To avoid overpaying for insurance and to make sure that you always have adequate coverage for your business needs, consult with a professional broker before your policy expires and have them assess whether your current policy still meets your needs. If it does, they can help you renew it. But if it doesn’t, they can suggest ways that you can update it or shop around to find you a new plan better suited to your dealership’s current needs.

Minimize your odds of filing a claim with risk management

One last tip for finding the right commercial insurance plan for your car dealership is to implement a risk management strategy at your business. This way, you can keep your insurance costs low and avoid an insurance premium increase upon renewal. Risk management is when you develop and adopt a strategy that helps you avoid risk as much as possible. The lower your chances of an incident, the fewer insurance claims you will likely need to file, and the fewer claims you file, the lower your car dealership insurance rates are likely to be. Your BrokerLink advisor will be happy to assist you in assessing your risk and implementing a risk management program.

What other insurance coverages may garages require?

  • Employer liability insurance
  • Employment practices liability insurance
  • Employee benefits liability insurance
  • Management liability insurance
  • Legal expenses liability insurance
  • Builders risk insurance
  • By-law policy insurance
  • Commercial earthquake insurance
  • Overland water insurance
  • Sewer backup insurance
  • Tool floater insurance
  • Pollution Liability

Contact BrokerLink for more information on car dealership insurance

Learn more about how car dealership insurance works, how you can find a policy for a great rate, and what types of coverage are right for your dealership by contacting BrokerLink today. As a full-service insurance brokerage and one of the leading brokers in Canada, we will be able to find you coverage with ease. Ultimately, no matter your commercial insurance needs, the BrokerLink team is here to help. Get started today by visiting our website, giving us a call, or speaking with us in person at one of BrokerLink’s insurance offices.

We can also accommodate:

  • Vehicle leasing
  • Repair garages including daily rentals and courtesy cars
  • Body Shops including tow trucks
  • Car Detailers
  • Motorcycle dealerships
  • Recreational Vehicle dealerships, including ATV’s and Snowmobiles
  • Trailer dealerships
  • Truck dealerships
  • Motorhome dealerships


FAQs on car dealership insurance

How can I save money on car dealership insurance?

You can save money on your car dealership insurance policy by choosing a higher policy deductible over a lower one, paying for your policy yearly rather than monthly, and taking advantage of bundling insurance discounts. As a business, there may also be discounts that you may qualify for, such as employment or education-based discounts.

Another way to save money on car dealership insurance is to implement a risk management strategy that will keep the number of incidents that occur at your dealership to a minimum. You can also work with a broker who specializes in dealerships, they can help you with risk management strategies and implement personal programs just for you and your business.

Does car dealership insurance cover my car dealership’s inventory?

Yes, car dealership insurance will cover damage to vehicles on the lot. For example, if a thief broke into your dealership overnight and stole a vehicle from your lot, your insurance company would help cover the cost of replacing the stolen vehicle, as well as repairing any physical damage to the space that resulted from the break-in. Remember that your car dealership's inventory will only be covered by commercial property insurance if the damage is caused by a named peril in your policy. Further, due to how expensive cars are, you will need to ensure that you purchase a high enough amount of commercial property insurance coverage.

Additional coverages can be purchased for your business if requested, employee crimes and dishonesty is offered as a separate policy if the business owner requests it. For more information contact BrokerLink.

Contact Us

Get in touch by phone, or by email to connect with Denise Hancock, our expert on garage auto insurance. No matter how you prefer to get in touch, Denise will answer your questions; explain the coverage options available for your business and provide a quote that’s tailored for your specific needs.


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