Not long ago I received an email from a gentleman who wanted to set up a mobile oil change business in Florida. He was concerned about what kind of insurance he might need and he was under the impression that a $1 million commercial liability policy was needed beyond his commercial auto policy for work truck vehicles. Okay, so let’s talk about this; you’re right?
Turns out it definitely is, you’ll see that a business car is not the same thing as completed operations or potential liability while on the job. For example, if a car you’re working on catches fire, your business auto policy won’t cover it. Do you see that point? So, this is the advice that I explained to him;
You most likely want to get a business insurance policy; A total of $1 million, 300,000 per general liability incident, with a “garage attendant’s liability” notation, and there will be some customer who may demand more, and also require additional insurance, not just a registered certificate of insurance.
Business auto insurance is another necessity, but most commercial business policies will write them together as one. Find a good “commercial insurance broker” and ask them to explore their sources, usually the broker-agent knows the insurers very well (as in speed dial) and can get you a good rate and the insurer will understand the difference between mobile and fixed costs. Generally, business liability insurance is based in part on your estimated gross income.
Don’t overestimate or you’ll pay too much, and don’t underestimate or you may be audited by the insurance company or they may just decide you’re not a viable risk. Believe it or not, most commercial insurance policies have a clause in their insurance contracts that they can audit you, and by signing the policy you agree in advance to those audits. Therefore, it is not wise to falsify information or underestimate it. If you find that you may have underestimated, you should call your agent-broker and explain that sometimes they will increase the premium, and sometimes they will increase next year’s gross sales estimates.
Now Florida is a huge market for mobile oil changes however let’s not forget there is some competition there some over 25 years in fact so insurance is just one aspect or piece of information one should consider . before starting such a business. Consider all of this and think about it, and develop a solid business plan.