Like any business, motorcycle dealerships need insurance coverage that protects owners and employees from untoward incidents that could result in personal injury or property damage claims. Motorcycle dealer insurance is essential for anyone in the business of selling motorbikes, and it may turn out to be the one thing that saves the company from financial ruin.
The question that now comes to mind is: what coverages do motorcycle dealers need? Insurance plans vary considerably among providers, and even within the motor vehicle industry, there can be considerable variance between the different insurance offerings.
For purposes of clarity, let’s define “motorcycle dealers” or dealerships as retailers of new or used motorcycles. Most also sell parts and accessories, motorcycling wear, and equipment. Aside from selling merchandise, they also usually offer repair and maintenance services.
Why do motorcycle dealers need insurance?
If you have clients that own motorcycle dealerships, you already know that they face considerable risks in the course of running their business. There is no way to predict when an incident may occur that could place the proprietor on the receiving end of a lawsuit.
Motorcycle dealership insurance can protect your clients against these risks. If anyone gets injured in your client’s shop or any of their employees’ actions or neglect causes property damage, insurance covers the cost of medical expenses, repair or replacement, and even settlements and legal fees.
The importance of this coverage can’t be overstated. Because the insurance firm pays for these expenses, your client’s personal and business assets remain untouched. Therefore, the business won’t go bankrupt and there is a much better chance of continuing on after the claims are settled.
What does motorcycle dealership insurance usually cover?
Most motorcycle dealerships will benefit from three types of insurance:
- Commercial Auto and General Liability (Auto Dealers Coverage Form) Insurance
- Commercial property insurance
- Business interruption coverage
The Auto Dealers Coverage form (Yes, it even covers Motorcycle Dealers) combines a commercial auto policy in addition to coverage while both company and customer vehicles are driven. For the premises general liability, (including slip and falls and claims related to products serviced or sold), comprehensive liability coverage extends to physical injury and property damage that may result from your clients’‒or their workers’‒negligence or action.
It also protects the business against claims arising from a defective or a poorly designed product. Depending on the terms of the policy, it may even protect your client against slander, libel, and advertising liability claims.
Commercial property insurance protects against losses or damage to your clients’ business property. It typically covers the building the dealership is located in as well as its contents.
Business interruption coverage protects the business against the loss of income and expenses if your client has to close down the business temporarily after an incident or natural calamity. It usually covers rent, staff salaries, and other expenses that the business may incur while it isn’t operating.
Those are the most indispensable insurance policies any motorcycle dealership should have and they should be prioritized above all others. But after obtaining those policies, your clients may also want to consider getting other specialty policies.
Depending on the company in question and the scale of its operations, these may not be absolutely necessary. Even so, some motorcycle dealerships may benefit from the additional coverage that these policies provide:
- Employee dishonesty. This protects the dealership against losses or damages resulting from theft or criminal acts done by company employees.
- Dealer physical damage. Also known as “dealer’s open lot coverage”, this covers the loss or damage of the company’s vehicle inventory.
- Garagekeepers’ liability. This covers the cost of vehicles owned by customers, which may be in the care, custody, or control of your client. This typically covers motorcycles left at the dealership for repair.
- Workers’ compensation. This compensates workers for injuries they may incur on the job.
How much does insurance for motorcycle dealerships cost?
Your clients will probably want to get both property and liability insurance to ensure that they are covered for risks and claims that motorcycle dealerships typically face. In most cases, a custom package consisting of policies that span both these insurance specializations is ideal.
The actual cost of your client’ premiums will vary depending on several factors, including:
- The size of the business
- The physical location
- The number of workers in the company
- The products and services offered
- The value of the property
- The total value of the inventory and other assets
- The type of coverage your client requires
- Risks factors such as crime rate and weather
As an insurance agent or broker, you will be expected to work closely with your clients to determine the type of insurance and the amount of coverage needed. Your client may expect you to provide quotes from many different insurance providers so they can compare benefits and coverage limits.
About K2 Insurance Services
K2 Insurance Services strives to create a leading underwriting and distribution franchise in the program insurance market. We’ve bridged the gap between agents and client payments with our efficient ACH payment system. Partnering with us gives agents the advantage of ACH payment capability that allows for direct billing through the firm. Call us today at (866) 429-1638 to find out how you could partner with K2 so you could offer top-tier insurance coverages and modern features to your clients.
