Like most small business owners, Michael Conte has had his fair share of moments wondering why he spent so much money on insurance.
But not once since the fall of 2012.
That October, as the record-breaking Hurricane Sandy pounded the east coast, Conte experienced damage he never thought possible. The owner of six car washes — including one directly on the Jersey shore — in addition to a Laundromat, dry cleaning business and rental property, he endured flooding, lost siding, had awnings blown off and missed months of income. One of his car washes, Rain Tunnel Express Wash in Bradley Beach, N.J., saw $80,000 in damage. The Laundromat was “devastated” with about $170,000 in damage to equipment. The dry cleaning business remained closed a year later — and while still waiting for grant assistance to come through, the Conte family hadn’t even started repairing their home, which held three feet of standing water after the storm.
“One thing I can tell you is that when you put your head on the pillow at night, you have absolutely no idea what’s going to be waiting for you the next day,” said Conte, whose family has been in the car wash business for more than 50 years. “My experience tells me to just expect anything. It can happen. And it can happen that quick.”
Conte, whose car wash holdings include four exterior tunnels (one with a four-bay, self-serve on the same property), one full-service and one self-service, says there’s no way he could have made it through without the support of family, friends, generous distributors and a great insurance agent right by his side. He also had a solid understand of how insurance worked — including the fact that his flood insurance was strictly about his buildings and equipment, but not business interruption, employee benefits, compensation or replacement of income. Others, he said, were unhappily surprised.
There’s the rub: Though a damaging event — especially a catastrophic one like Hurricane Sandy — is not ever likely, it is still possible. And the time to figure out whether your insurance is adequate isn’t after it happens.
“You can’t have too much,” said Conte, who held full coverage in addition to umbrellas even before the storm. “And now that I’ve been through Sandy, I make sure I cross every ‘T’ and dot every ‘I,’ and I check it four times.”
DIFFERENT BUSINESS MODEL,
DIFFERENT NEEDS
Summer Cole, CIC, CISR, is the director of the car wash program at The Insurancenter, an independent agency based in Joplin, Mo. The program was started back in 1987, a time it was challenging to find insurance to specifically meet the needs of the industry, she said. That’s not to say it isn’t comparable to others; first, it aligns with those that feature numerous mom-and-pop-type businesses with few large chains. It’s also similar to, for example, dry cleaning business and garages, in that it can involve taking possession of a customer’s property for a time.
It’s unique, however, in that it might include self-service bays with virtually no employees; it might feature minimal equipment or a full, sophisticated complement; and it might be a full-service business with a larger staff and additional services. The business model can certainly impact needs.
But most often, Cole said, claims involve damage to customers’ cars.
“They’re usually minor, like when something gets caught in the brush and it beats against a car,” Cole said. “But before you realize it, it can damage two or three cars.” Other damage might come from fender benders in the parking lot as staff are maneuvering cars — diligent checks of employee driving records are essential, she notes — or when customers slip and fall on, perhaps, wet surfaces.
Claims may be small, but they certainly can add up, and car washes are increasingly adding security cameras for an accurate history of what’s going on.
Stefanie Rico, CISR, commercial lines sales executive with Partee Insurance Associates in Covina, Calif., said one misconception she sees in small business insurance involves workers’ compensation: It’s needed even when there’s only one employee. Employers often think they can simply list the employee as a contractor, she said, “and that’s wrong. Business owners may think the pricing will be too expensive, but if they work with a broker, that pricing can still be competitive.”
In many cases, standard business owner’s policies (known as BOPs) can cover the majority of a car wash operator’s needs (including, for example, loss of business income if the business is shut down for a period of time). Then there’s garagekeepers’ insurance; if you’re piecing together your own policy, Partee Insurance does note that there’s a difference between that and garage liability. It’s all about ownership. Garage liability is for owned vehicles, such as those part of an auto dealership. But garagekeepers is for covering the vehicles owned by others that are taken into your possession.
In the dry cleaning business, as Conte would tell you, such insurance is known as bailee’s customers insurance, covering the items left in the business’ care from fire, flood, burglary or other damage. It also applies to, for example, valets and those who repair jewelry.
But whatever it’s called, he said, “You have to make sure it’s covered.”
