At one point in time or another, everyone has heard about the importance of insurance coverage—and the context can vary. One day, you may be having a conversation about medical insurance. The next, you may find yourself discussing home insurance.
When it comes to insurance for your shop, figuring out the right coverage approach is important. Just like how you would want the right support for a broken arm in your personal life, there are options with business insurance that can help you, your work, and your livelihood feel taken care of.
However, there is a lot to know about the world of business-related insurance, and it’s always helpful to have someone break it all down. For this Quick Lube Q&A, NOLN spoke with Brittney Passini of Acuity Insurance about specialized coverage, workers’ compensation, property insurance, and so much more. Passini is the director of product development for Acuity Insurance.
NOLN: Brittney, can you provide a brief overview of Acuity Insurance and the work you do there?
Brittney Passini: Acuity Insurance, headquartered in Sheboygan, Wisconsin, provides both commercial and personal insurance. Acuity insures nearly 150,000 businesses, including nearly 350,000 commercial vehicles, and more than 550,000 homes and private passenger autos across 32 states.
In my role as director of product development, I develop and oversee Acuity's new commercial product offerings. I analyze industry trends and competitor insights to advise on strategies to strengthen Acuity's position as a leader in insurance innovation. I work to make sure our commercial policyholders have the best possible options when it comes to their insurance.
NOLN: Can you describe some common components of business insurance that directly relate to property and coverage of physical things (such as a building or a commercial vehicle)?
Brittney Passini: The main coverage you probably think of for physical things is property insurance. Property insurance covers physical assets, like your building, equipment, and inventory, from potential risks like fire, theft, or storm damage, ensuring that the business can recover quickly and continue operations without significant financial disruption.
A separate but related coverage is business interruption coverage. Business interruption helps cover lost income and ongoing expenses while your business is being repaired after a covered event. Another important physical asset to protect is your commercial vehicles. Commercial auto - physical damage coverage applies when business vehicles are damaged by accidents, fire, vandalism, and other situations.
NOLN: What about the components such as workers' compensation and liability insurance? What's important for shop owners to know about these areas?
Brittney Passini: Workers’ compensation covers medical expenses for work-related injuries, provides wage replacement during recovery, and includes benefits for various types of disability.
In the unfortunate event of a worker's death, it also supports funeral costs and provides financial assistance to the worker’s dependents. It is an important part of a shop’s insurance coverages and is required by law in almost every state.
Liability insurance provides shop owners with financial protections. Two important liability coverages are general liability and commercial auto liability. General liability covers various risks associated with business activities. It provides protection for bodily injury suffered by a third party and for damage to someone else's property. The policy also addresses personal and advertising injuries and coverage for medical expenses related to minor injuries, regardless of whether the insured is at fault.
Commercial auto – liability coverage protects against financial losses from accidents involving business vehicles. It covers damages to other vehicles and property, provides for bodily injury claims, and handles repair costs if the shop’s business vehicles cause damage. This insurance helps ensure the shop is not left with significant expenses due to vehicle-related incidents.
NOLN: What would you say are some potential coverage opportunities that people with a smaller operation could consider? And vice versa, what about someone with a larger multi-shop location operation?
Brittney Passini: Smaller operations may not need as many specialized coverages as they start out. Making sure you’re not paying for coverages you don’t need may be as valuable as adding additional coverages as your operations grow.
Larger, multi-shop locations should consider purchasing umbrella or excess insurance which provides additional coverage beyond the limits of your existing policies. Verdicts can get extremely expensive, and this coverage provides an additional layer of protection if you’re facing a large verdict.
Another coverage to consider is employment practices liability insurance (EPLI), which protects businesses from legal actions arising from the hiring and firing process, such as discrimination, wrongful termination, or harassment. This is especially important as you have multiple locations or scale your workforce.
NOLN: What do you think is commonly misunderstood about business insurance?
Brittney Passini: One common misunderstanding about business insurance is that a business can be too small to need insurance. All businesses face risks no matter the size, and insurance can help reduce the financial ramifications if something happens.
Another misunderstanding is that all commercial policies are the same, as we’ve discussed, there are many different coverages you can choose from, and commercial insurance can get complicated. Understanding which coverages you need, which you have, and any associated deductibles and limits, is important when you’re comparing companies, policies, and prices.
An independent insurance agent can help shop owners make those comparisons and build the right commercial policy for their needs.
Most missed insurance coverages for auto shops are:
- Cyber: If your shop handles or stores customer data on your digital devices, cyber insurance is important. Cybercrime is one of the fastest-growing types of crime in the world. Every business of every size faces cyber risk. Companies can be held liable for damages resulting from loss of confidential customer or business data and face costs associated with responding to breaches and recovery after a loss.
- Portable tools or employee tools coverage: An employee tools coverage form would cover if your shop is broken into, and employees' tools that are used in your business are stolen.
- Mechanics E&O: Some insurance carriers offer an errors and omissions endorsement specifically for mechanics. This coverage commonly includes broad form products coverage, coverage for your work, and coverage for any negligent act, error, or omission that occurs during the course of your auto repair shop operations.
- Garagekeeper's insurance: Auto shops have other people’s vehicles in their possession. This coverage protects them in the event that a vehicle in their possession is damaged.
NOLN: What are some steps that shop owners should take when evaluating the types of insurance coverage they need for their operation? What should they take into consideration?
Brittney Passini: I recommend working with an independent insurance agent who knows your type of business. They can help you choose the right coverages and the right carrier who can provide you with the best service and policy.
When choosing insurance, it’s important to not just choose the right coverages but also the right company. Often during a claim, you will be relying on your insurance company to help provide you with expert guidance to navigate through all the steps. You want the comfort of knowing that they will be there when you need them. Claims satisfaction ratings can be a useful resource to understand how they respond when you need them.
NOLN: What else do you think is important for shop owners to know about any of the topics we've touched on?
Brittney Passini: Insurance should be there when you need claims paid but they can also be a partner to help your business operate safely and profitably. Check with your insurance company about the resources they provide.
You may be able to get additional value out of your insurance partnership from things like loss control resources, safety trainings, and nurse helplines for injured workers.
