Description of operations: Automobile repair shops can offer a wide variety of mechanical services, from engine repair to tune-ups. They may specialize in a specific type of repair, such as transmissions or brakes. Normally, auto repair shops do not specialize in body work or painting operations, but they will perform those necessary but incidental to other repairs. Other operations may include the retail sales of automobile accessories and tools. Some repair shops are a part of a gasoline or diesel fuel sales operation, or part of an automobile dealership.

Additional services can include towing, auto club affiliations, pickup and delivery of customers, and the loan or rental of replacement vehicles. Some will have a mobile unit to perform repairs to stranded vehicles or at the customer’s location.

Property exposurecomes from flammables such as lubricants, oils, degreasers, and solvents, used in the repair operations. They must be properly labeled, stored and separated. Aerosols and flammable additives contribute to the overall fire load. Theft may be a concern because the items sold are considered to be target items. Appropriate security controls using alarms, lighting, and access to the premises should be considered. Welding is often a part of the operation and needs to be evaluated for proper handling of the tanks and gases, as well as adequate separation from the other operations with either a separate room or flash/welding curtains. Tires do not catch on fire quickly; however, when they do burn, the fire is difficult to put out and an oily smoke permeates the entire area.

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

Inland marine exposure are from accounts receivable if the store offers credit, computers to monitor inventory, goods in transit if goods are delivered to customers, 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. There is also the attractive nuisance of cars in the parking lots. Customer waiting areas should be provided and customers must not be permitted in the garage area. 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.

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 is open after dark, adequate lighting and appropriate security for the area must be present. Chains should be in place to prevent entrance after hours.

Products liability exposure can be high due to the potential for an accident in the event that the vehicle is not properly repaired. Check-off procedures should be in place.

Environmental impairment exposures can be significant due to the disposal of used oils, solvents and other hazardous wastes. Adequate procedures should be in place and must be followed to prevent any leakage or contamination.

Automobile liability exposuresare from errand running to pick up needed supplies. All drivers should have valid licenses and their MVRs regularly checked. Towing presents a more serious exposure due to the potential for damaging customers’ vehicles. All tow drivers must be experienced in towing. Vehicles must be regularly checked, in particular the hoists and tow bars. If there is any rental of vehicles, each should be inspected and reconditioned before it is rented again.

Garagekeepers exposure comes from the physical damage losses to customers' vehicles while in the repair shop's care, custody and control. Lots must be well lighted and chains should be in place to prevent transport. Fences and other security may also be appropriate.

Workers compensation exposurescan be heavy. Brake turning, welding or other repair work must be handled only with appropriate safety equipment, especially eye protection. Lifting of a vehicle by hoists, jacks, and other mechanical means can result in injury should the equipment malfunction. Lifting by nonmechanical means can result in back injury, sprains, strains or hernias. If the shop sells batteries, leakage or spilling of battery acids can cause burns on contact with skin and respiratory problems when inhaled. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting.

Minimum recommended coverage:

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

Other coverages to consider:

Forgery, Computer Fraud, Signs, Employment Related Practices

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