Top Auto Dealer Insurance Coverages Every Dealership Needs

Running a car dealership is exciting, but it comes with significant responsibilities. From managing inventory to keeping employees and customers safe, protecting your business with the right insurance coverages is essential. Without proper coverage, a single accident, theft, or legal claim could cost your dealership thousands — or even put you out of business.

At All American Bonds and Insurance, we specialize in helping car dealers get the coverage they need to operate safely, confidently, and in compliance with state requirements. Here’s a guide to the top insurance coverages every dealership should have.

1. Garage Liability Insurance

Garage liability insurance is a cornerstone for any auto dealer. It protects your business against claims of bodily injury or property damage that occur as part of your dealership operations. This includes accidents during test drives, slips and falls on your lot, or other incidents tied to your dealership’s daily activities.

2. Dealer’s Open Lot (Inventory) Coverage

Your vehicles are the heart of your business. Dealer’s open lot coverage protects your inventory from damage due to fire, theft, vandalism, or severe weather. Without it, a single incident could cost your dealership thousands of dollars in losses.

3. Garagekeepers Coverage

If your dealership provides vehicle servicing, repairs, or detailing, garagekeepers coverage is essential. It protects vehicles in your care, custody, or control from damage while on your lot or in your service area. This coverage ensures customers feel confident leaving their cars with you.

4. Commercial Auto Coverage

Many dealerships use company-owned vehicles for errands or transport. Commercial auto coverage protects your business if one of these vehicles is involved in an accident. It ensures compliance with state laws and covers damages or injuries that may occur.

5. General Liability Coverage

General liability insurance provides broader protection for incidents outside of garage operations, such as advertising injury, customer property damage, or third-party bodily injury on your premises.

6. Workers’ Compensation Coverage

If you have employees, workers’ compensation coverage is often required by law. It provides medical and wage benefits if an employee is injured on the job, protecting both your staff and your business from financial liability.

7. Cyber Liability Coverage

Modern dealerships handle sensitive customer information — from credit applications to driver’s licenses. Cyber liability insurance protects your business from data breaches, hacking, and cyber fraud, helping you avoid costly legal and reputational issues.

Why These Coverages Are Essential

Each of these coverages protects a different part of your dealership, from inventory and vehicles to customers and employees. Together, they provide comprehensive protection that keeps your dealership compliant, secure, and financially safe.

At All American Bonds and Insurance, we help auto dealers nationwide get the right coverage quickly and affordably. Whether you’re a small used car lot or a growing multi-location dealership, we can help you find the right protection for your business.

👉 Get a fast, free quote today at QuickerBonds.com and ensure your dealership is fully covered.