Here Is a List of The Types of Coverage Your Car Rental Business Might Need
The car rental industry has seen massive shifts as a result of the coronavirus pandemic. With an industry heavyweight like Hertz filing for bankruptcy as a result. This is as a result of the impact which the pandemic has had on tourism related businesses which includes car rental companies. The impact was largely negative in the initial phase of the pandemic but car rental companies have adapted to the new business environment. One of the key ways of protecting a car rental company from unexpected liability is through business insurance. There are many different types of insurance and each will offer different protections to a car rental business.
General Liability Insurance
General liability insurance will protect a car rental business from a variety of commonplace mishaps which are part of the process of operating a business. Some of the liabilities which general liability insurance policy protects a business against include: advertising and personal injury, injury to the body, legal bills, damage to property and payments which are related to medical needs. There is no legal requirement for a business to have general liability insurance but operating without this type of insurance opens a business up to unnecessary risk. A lawsuit has the potential to devastate a small business and this risk can be substantially mitigated by a general liability insurance policy.
There are many practical examples of liabilities which car rental companies incur which would be covered by a general liability insurance policy. For example, a customer is reversing their car out of their parking space when they accidentally back into another car. This damages both cars and the customer is injured in the process. A general liability insurance policy would likely cover both the medical expenses and the damage to the vehicles. While there are many situations which a general liability insurance policy will cover they are not all inclusive. This is why it is important to have other types of car rental business insurance in addition to general liability insurance.
On average car rental businesses spend between $450-$1000 per year for general liability cover of $1 million. The price varies depending on a number of factors which include the location of the business, the amount of employees which the business employs and the business’s deductibles. It is possible to acquire general liability insurance at more favorable rates when purchased as part of a business owners policy (BOP). A BOP is a bundle of insurance types for a business which makes it more comprehensive and provides greater protection to a business.
Business Vehicle Insurance
Business vehicle insurance is a type of insurance which protects vehicles used for a commercial purpose. This naturally includes rental cars and it is highly recommended that each car in a rental car company’s fleet is insured with a policy such as this. Due to the high value of rental cars it is important to ensure that the market value of the business’s vehicles are fairly represented when calculating the insurance premium. This is a type of insurance for car rental companies which can be purchased as part of a package of insurance such as a BOP.
Workers Compensation Insurance
Most states require that businesses which have employees must have workers compensation insurance. As employees are essential to the rental car industry most rental car businesses will have employees. This type of insurance provides protection to employees for illnesses or injuries which they may incur while at work. This also protects the business by paying for these expenses for the wellbeing of the employees.
Commercial Property Insurance
Commercial property insurance protects properties which are owned by a business for the operation of that business. This includes parking lots and office space which a car rental company would likely own. This is another form of insurance which can be purchased as part of a bundle of insurance types through a BOP.
Final Thoughts
The car rental industry has seen a lot of turbulence as the result of the pandemic. Therefore, it has never been more important to be prepared for the unexpected. This is in addition to the everyday liabilities which a car rental business takes on in order to function optimally. There are many types of insurance available and the types which are most relevant to car rental businesses are general liability insurance, business vehicle insurance, workers compensation insurance and commercial property insurance. This is not an exhaustive list but it covers the most important bases for a car rental company.
