Garage & Auto · Auto Dealers
Auto dealership insurance in Michigan
Dealers carry risks most businesses never face: vehicle inventory on the lot, customers' cars in the service bay and test drives on public roads. We build dealer packages that cover each department, new or used, franchise or independent.
Schedule a Coverage ReviewWhat insurance does a car dealership need?
A car dealership typically needs auto inventory physical damage for vehicles on the lot, garage liability for its premises and operations, garagekeepers for customers’ vehicles in the service department, property coverage for buildings and equipment, crime coverage, employment practices liability, commercial auto, and a commercial umbrella. Most dealers also carry workers’ compensation, and many need cyber liability, ERISA bonds and pollution coverage for underground storage tanks.
| Coverage | What it actually touches | Where it stops |
|---|---|---|
| Auto inventory physical damage | Vehicles you hold for sale, against hail, flood, theft and collision | Customers’ vehicles and your service loaners, unless scheduled |
| Garage liability | Injury or damage to others from your premises, sales and service operations | Damage to customers’ vehicles in your care |
| Garagekeepers | Customers’ vehicles left for service or repair | Vehicles you own or hold for sale |
| Crime | Employee theft, forgery and money or securities losses | Inventory shortages with no identified cause |
| Employment practices liability | Claims of discrimination, harassment and wrongful termination | Wage-and-hour and other excluded claims |
| Commercial umbrella | Liability above garage, auto and employer’s liability limits | Damage to your own property or vehicles |
What is the difference between garage liability and garagekeepers coverage?
Garage liability covers injury or property damage your dealership causes to others through its premises and operations, such as a customer injured in the showroom or an accident during a test drive. Garagekeepers covers damage to customers’ vehicles while they are in your care, custody or control, such as a car damaged in the service bay or stolen from your lot overnight. A dealer with a service department needs both.
Do auto dealerships need cyber liability insurance?
Yes. Dealerships hold a large amount of customer data across sales, finance, service, parts and body shop operations, including financing applications and identification. The idea that only large companies face cyber threats is long outdated. Cyber liability coverage, combined with a well-executed response plan, is one of the most important ways to limit out-of-pocket costs if customer data is breached.
- Cyber Liability — Breach response, notification and liability coverage
What other coverages should a dealership consider?
Beyond the core dealer package, most dealerships should review workers’ compensation for sales, service and detail staff; ERISA bonds if the dealership sponsors an employee benefit plan; and storage tank pollution coverage if there are fuel or waste oil tanks on site. Each addresses a risk the core package does not, and each is easier to place correctly when it is reviewed alongside the rest of the program.
- Workers’ compensation. Covers medical care and lost wages for employees injured on the job.
- ERISA bonds. Protect employee benefit plans against fraud or dishonesty, including theft, embezzlement, forgery and misappropriation.
- Storage tank (UST) pollution. Covers cleanup and liability from leaks or spills from storage tanks, which general liability policies typically exclude.
Related: Garage & Auto Services · Commercial Auto · Cyber Liability · Commercial Umbrella · Workers’ Compensation
This page is educational and does not alter any policy. Coverage is determined by the actual policy forms, endorsements and declarations issued by the insurer.