What Type of Insurance Does a Body Shop Need in New Mexico? | Elemental Risk Management

Owning an auto body shop in New Mexico isn’t easy. With a constant influx of vehicles that need to be repaired, serviced, and returned to their respective possessors, the probability of incurring accidents is inevitable. To ensure safety from the sword of Damocles hanging over your head all the time, you should consider insurance for your business to curb the risk of any future contingency.

You might need different types of insurance for your body shop. In New Mexico, insurances for small businesses are disseminated into more than four significant components. We have rounded up a catalog of coverages that would pack quite a punch on your business to keep it unscathed in the event of any mishap.



No matter you are a start-up or a well-established business, consider protection as a prerequisite. You and your business need protection against lawsuits and damage to property. But there is no magic answer to the question that how many coverages would measure up to the extent where your business becomes invincible to unpredictable misadventures. However, a fair solution to the quandary is General Liability Insurance.

General liability comes in handy when someone gets hurt or bodily injured at your shop, or your shop undergoes a property damage situation. 

The Worst-Case Scenario: 

Mr. Markus shows up to collect his car, which was in your shop for a trivial repair. While he was at your shop, he takes a bad fall and breaks his leg. Let’s assume Mr. Markus decides to sue you for the damage caused to him on your property. Here the GL comes into the picture.

General liability insurance will offer you protection against:

• Lawsuit
• The medical expenses of Mr. Markus
• Legal fees, when Mr. Markus sues you.
  
  

As an auto body shop, you deal with flammable stuff on regular basis such as solvents, oils, paint, and gasoline. Besides the burnable materials, your property itself worth a great deal of money, which is poignantly prone to damage or any unforeseen natural calamity.

Property insurance is there to protect your business space no matter you own or rent it. As there are different business property covers available, you can get a tailored made plan of your convenience. 

Business Property Insurance will offer you:

• It covers the physical assets of your business.
• It covers business equipment such as computers, laptops, and printers.
• It protects your lost income (from business interruption).
• It protects your external assets as well, for instance: fences, sheds, and warehouses.
• It covers the furniture and fixtures of your office.
• It covers the product inventory housed in the business space.
• It covers heavy machinery, for example, manufacturing plants.
• It covers essential documents of your business.
  
  

Even if you have only one employee working for you, you qualify for Workers' Compensation Insurance. As the name implies, workers' insurance safeguards you against any expenses incurred in the event of any work-related injury or accident happened to any of your employees.

The Worst-Case Scenario: 

Let's assume John works at your auto body shop in New Mexico; while fixing a car, a heavy wrench falls off on his foot, causing him severe internal damage.

Worker's Comp. Insurance will provide the following coverage for your employee:

• Medical coverage will be given for the job injury.
• Rehabilitation costs, if any, will be paid by the insurance company.
• The employee will be paid a temporary disability payment.
• In case of fatal injury, employee's survivors will be eligible for a death benefit.
• Affected employees can have legal representation from the insurance company.
• The employee will have protection from the employer in the event of any lawsuit filed by the employer.

Your garage holds an integral position for the smooth follow of work. It’s a place where you keep the clients’ car for repair. This entails you are the person who calls the shot in the garage and would be held responsible in situation pertaining to:

• Fire
• Vandalism
• Explosion
• Theft

Garage keepers’ coverage is segmented into the following types:

• Legal liability coverage: Protects you only when you are legally liable to pay the cost of damage to the customer’s car.
• 
  
• Direct primary coverage:You can have full charge of the customer’s vehicle as this insurance covers the damage even if you are not legally liable to make amends.
• 
  
• Direct excess:It’s a cheaper alternative than direct primary coverage.Your policy pays the difference of the amount collectible under the clients’ standard policy. 
  

Even though you have General Liability insurance, there are chances that it would appear insufficient to cover up the overall cost of damage. What happens in such instances? You end up paying the difference yourself. This might make you question all the insurances you have bought, and none of them could fully protect you. 

The wisest decision would be to opt for Umbrella insurance. Let us dissect how it works with the help of an example:

Example: 

Say your driver has an accident of a sensitive nature, which springs up an exhausting number of medical bills and requires a long recovery of the innocent party. In this situation, your General Liability Insurance will kick in, even if your other covers leave off. What if the cost of damage exceeds the claim limits of GL? Umbrella insurance sits on top of all the covers, as it will take care of the difference that even your GL couldn’t pay-out. 

As no two snowflakes are alike, each type of insurance for a body shop is designed to address your business's specific aspect. Getting the above-shared coverages would help you secure yourself to a great extent, come what may. For more information about getting the right auto body insurance speak with a Elemental Risk Management specialist today!