Description of operations: Automobile accessories stores sell a wide range of retail and wholesale auto parts and supplies for repair and replacement. Some automobile accessory stores have machinery operations to repair or rebuild parts such as brake drums or to custom-make old, difficult-to-replace parts.

Other operations may include repair services, facilities to repair your own vehicle, rental of tools and equipment, and tire replacement operations. Used and rebuilt parts may be available as stock. Some specialize in foreign parts. Many stores are part of a franchise, chain, or purchasing group.

Property exposures come from flammables such as lubricants, oils, degreasers, and solvents used in the repair operations. They must be properly stored, separated and controlled. Aerosols and flammable additives contribute to the overall fire potential. Theft may be a concern as the items sold are considered target items. Appropriate security controls using alarms, lighting, and access to the premises should be considered.

Crime exposures are from employee dishonesty and loss of money and securities either from holdup or safe burglary. Employee dishonesty is controlled through background screening, inventory monitoring, control of the cash register, disciplined controls and division of duties. Theft prevention requires controls of monies kept in the cash drawers and regular bank drops.

Inland Marine exposures are from accounts receivable if the store offers credit, computers to monitor inventory, and valuable papers and records due to vendors’ records. Backup copies of all records, including computer records, should be made and stored off premises.

Premises liability exposure comes from slips and falls due to public access to the premises. All stock should be on shelves that are easily accessible to customers. Floor coverings should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure. If there is any rental of equipment, it should be inspected and reconditioned before it is rented again. If customers are permitted to service their vehicles on premises, housekeeping and supervision are critical.

Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the premises are open after dark, adequate lighting and appropriate security for the area must be present.

Personal injury exposure can arise from apprehending suspected shoplifters. The use of closed-circuit camera systems prevents such incidents from evolving into a "he said, she said" situation. Employees must be trained to deal with such delicate situations properly.

Products liability for this type of operation is normally low unless the store repairs vehicles or assists vehicle owners with their do-it-yourself repairs. If the applicant directly imports or reconditions items for resale, the exposure increases to the point of a manufacturer. The completed operations exposure for brake turning or other service work must be considered due to the potential for an accident in the event of product failure.

Automobile liability exposure is generally limited to hired and nonowned for errands only. Any potential driver should have a valid driver’s license and an acceptable MVR. If delivery is a regular part of the operation, any driver hired for that position must have a commercial license and MVR should be checked and monitored. All vehicles must be maintained with documentation kept. If the store repairs customers’ vehicles, garagekeepers liability should be considered.

Workers compensation exposures are generally light unless repair takes place. Brake turning, welding or other repair work must be handled only with appropriate safety equipment, especially eye protection. Additional exposures are from lifting which can cause back injury, hernias, sprains, strains and also from slips and falls. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. Employees performing maintenance or repair work on customers’ vehicles should be properly trained.

Minimum recommended coverage:

Business Personal Property, Business Income, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Business Automobile Liability and Physical Damage, Hired and Nonownership Auto, Workers Compensation

Other coverages to consider:

Building, Leasehold Interest, Real Property Legal Liability, Forgery, Computer Fraud, Installation Floater, Signs, Employment Related Practices, Garagekeepers

Reprinted copyrighted material with permission by the Rough Notes Company, Inc.