car dealership

Owning and operating an auto dealership can be a very rewarding experience. After all, auto dealerships offer customers the opportunity to find and purchase the perfect new or used vehicle that fits their unique driving needs as well as numerous services to help customers keep their vehicle in good condition and stay safe behind the wheel.

However, auto dealership owners also face a number of exposures that they will need to contend with on a daily basis in order to successfully run their business. Take a look at some of the risk categories and their considerations that auto dealership business owners should review:


Flammable Spraying – Auto Body Services:

  • Does the dealership offer auto body services? If so, do these services include spray painting?

  • Are spray booths compliant with NFPA 33?

  • Is the spray booth protected by an automatic fire protection system?

  • Is ventilation installed in a way that removes flammable vapours? Is ventilation used when spraying is done?


Premises and General Operations:

  • During winter, are the parking lot and sidewalks clear of snow and ice?

  • Are customers always accompanied by an employee when walking around the outdoor vehicle lots?

  • Is there an emergency lighting system available in the event power is lost?

  • Are hydraulic lift areas outlined to let authorized visitors know where they shouldn’t cross or stand?


Completed Operations – Vehicle Sales:

  • Before being released to a purchasing customer, are all new vehicles properly inspected by a qualified employee?

  • If new vehicles are issued to employees as demo vehicles, are they properly inspected, serviced and repaired as needed before being placed back in stock?

  • If used vehicles are sold, are these vehicles thoroughly inspected before being placed on the sales lot?

  • Is there an adequate recall plan in place?


Test Drive Safety – Vehicle Sales:

  • Do employees accompany customers on vehicle test drives?

  • Are employees required to wear seat belts for the entirety of the test drive?

  • Are there measures in place to ensure the vehicle’s mirrors and seating arrangements have been properly adjusted before the test drive begins?

  • Are there designated routes in place for vehicle test drives?



Find out more:

Assessing your exposures and taking the appropriate precautions can go a long way toward protecting your auto dealership business. Download our “Loss Control Questionnaire: Auto Dealerships” guide for an in-depth list of more ways to minimize gaps in your risk management: