Most dealers don’t think about insurance until something goes wrong. But when it does, the consequences can be devastating—not because you didn’t buy a policy, but because what you bought doesn’t match your operation anymore.
If you’ve grown, expanded service, increased inventory, hired new staff, or changed your lot setup in the last 18 months, there’s a good chance your current liability program is outdated or misaligned.
Let’s walk through a simple five-point audit you can run today to determine whether your dealership is truly ready for a worst-case scenario—or just hoping it never happens.
1. Is Your Business Interruption Limit Still Relevant?
Business interruption (BI) coverage is meant to replace lost income during a shutdown caused by a covered peril (like a fire, flood, or major event). But here’s the problem: many BI limits were set years ago, based on outdated assumptions about revenue, cost structure, or downtime.
Ask yourself:
- Could your dealership cover 60–90 days of full expenses without revenue?
- Does your BI limit reflect your current gross profit, not just top-line sales?
- Have you added new lines of business (e.g. electric vehicles, fleet, marine) that increase exposure?
Most garage packages don’t update BI automatically—and it’s one of the most misunderstood coverages on a dealer’s policy.
2. Do You Have EPL and D&O Coverage That Matches Today’s Legal Climate?
Employment Practices Liability Insurance (EPLI) and Directors & Officers (D&O) coverage are often dismissed as “nice to have”—until a lawsuit shows up from a terminated employee or former partner.
Common dealership exposures include:
- Discrimination or wrongful termination claims
- Failure to accommodate a medical leave
- Wage and hour disputes
- Breach of duty or fiduciary conflicts
Canadian dealerships are seeing more HR-driven risk—and standard commercial general liability policies don’t cover it.
Look for a standalone EPLI endorsement with:
- Legal defence cost coverage
- No retroactive date gaps
- Clear, modern definitions of employment offences
D&O is equally important for family-run or multi-location dealerships where governance and risk decisions flow through a leadership team.
3. Are Your Deductibles and Limits Aligned with Reality?
Premium-focused buyers sometimes accept high deductibles or low sublimits without fully understanding the trade-off.
Before your next renewal, check:
- Your deductible for premises liability (e.g., slip-and-fall claims)
- Whether test drive or courtesy car claims have different deductibles
- If you’re carrying replacement cost on property and tools—not ACV
- Whether catastrophe-related events (hail, flood) are on a separate schedule
One of the most common errors we see is a dealership carrying a $25,000 property deductible… but only $50,000 in coverage on their service bay tools and equipment.
It sounds simple, but that math breaks down fast when the wrong claim hits.
4. Who’s Really Handling Your Claims?
Claims service isn’t just about being “covered.” It’s about how quickly and thoroughly your team can get back to business.
Here’s the truth: many brokers disappear once the claim gets filed. You’re left waiting for an adjuster who’s never handled a dealership file before, reading generic policy wording, while your business grinds to a halt.
Look for an insurance team that provides:
- Direct access to dealership-specialized adjusters
- 24/7 emergency support
- Real advocacy—not just claim filing
- Proactive site visits or audits that prepare you before a claim ever hits
If your current broker doesn’t have dealership claims stories they can share, it’s time to ask what they’re really bringing to the table.
5. Have You Benchmarked Your Program Against Peer Dealerships?
You benchmark your F&I performance. You benchmark your CSI scores. Why not your liability coverage?
We’ve worked with dealer principals who were shocked to find they were:
- Underinsured by over $1M on lot inventory
- Overpaying on garage liability due to outdated risk rating
- Missing critical endorsements like garage keepers legal liability or loss of use
An annual risk review isn’t just about checking boxes. It’s about identifying gaps based on how your dealership compares to others with similar scale, services, and territory.
That’s exactly why we developed a dedicated Dealer Liability Benchmarking Report, available to partners and prospective clients.
How to Run a Real Liability Readiness Audit
Here’s what I recommend to every operations manager or GM who asks me where to start:
✅ Pull your most recent policy binder.
Look for dates, limits, endorsements, deductibles, and declarations.
✅ Print and run this 10-point Dealership Liability Checklist.
It’s simple, fast, and eye-opening.
✅ Book a 10-minute conversation with a dealership liability expert.
Even if you don’t make a change, you’ll know what to ask for next time you renew.
You can do that here: getcertain.ca/meet/royston
Insurance That Works When Things Go Wrong
A liability policy is only useful when it’s tested. And the only way to know it works is to review, audit, and pressure-test it before the claim ever happens.
Dealers who operate with clarity—not assumptions—are the ones who sleep better at night and get back to business faster when something breaks.
If you’d like to review how your program stacks up or compare it to other dealers in your region, I’d be happy to walk you through it.
→ Learn more about our Dealer Insurance Program
→ Book a confidential review with me
