Business interruption insurance for garage businesses
A garage business does not lose its turnover when the building is damaged, but the moment the vehicle lift, the spray booth or the alignment rig can no longer be used.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
Enter your details; you will receive a proposal within one working day.
We compare the offerings of several insurers
An adviser checks whether the cover suits your activities
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
At a motor business the production capacity sits in a small number of work stations. Two lifts, a spray and drying booth and an alignment bay determine how many cars can pass through the workshop each week. If one of those is lost through fire or water damage, your turnover falls immediately, even though the building is still standing.
The gross profit here is turnover minus the parts and body panels you do not buy in during a standstill. What runs on is rent or mortgage, the pay of mechanics and sprayers, lease instalments on diagnostic equipment and the costs of your brand or franchise formula. Trading in used cars carries a different margin from workshop turnover. Those two streams have to be declared separately.
Note also what is not included: customers' cars and trading stock belong on the motor trade insurance, and your tools and equipment on the business contents insurance for garage businesses. This policy pays only your own lost gross profit during the indemnity period.
What does business interruption insurance for garage businesses cover?
The structure of the cover in three parts, with an overview per situation below.
The basis
Gross profit
Turnover minus the variable costs that move with it.
Fixed costs continue
Profit margin you lose
Update annually
The term
Indemnity period
Calculate back from full turnover, not from the rebuild value.
Clearance and permits
Rebuilding and fitting out
Winning customers back
Additional costs
Alternative
The additional costs of not standing still.
Temporary location
Outsourcing to third parties
Often cheaper
What is covered
Situation
Business interruption
Additional costs
Downtime after a fire at your premises
Yes
Yes
Loss of turnover after water damage
Yes
Yes
Additional costs to keep going elsewhere
No
Yes
Failure of a supplier
Sometimes
Sometimes
Digital downtime without physical damage
No
No
Loss of turnover due to lower demand
No
No
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
Your capacity sits in a handful of work stations
A workshop with three lifts loses a third of its capacity if one goes out of use, and a body repair business is at a complete standstill without a spray and drying booth. So do not calculate the insured gross profit on annual turnover alone, but look at which part of that turnover depends on which installation. The delivery and installation time for a new booth or alignment rig then determines how long the standstill lasts.
Approvals and equipment are tied to the premises
An APK approval (the Dutch MOT) is tied to the test bay and the approved equipment at that address. If you move temporarily to a fellow garage, you cannot simply work there under your own approval. The same applies to a manufacturer's approval with requirements for tools and workshop layout. Include that recovery time in the indemnity period; restoring an approval does not run in step with the handover of the building.
A breakdown of the lift is not yet business interruption
If a lift, compressor or extraction system fails without fire or water, there is no insured peril and the business interruption policy pays nothing. The repair belongs on machinery breakdown insurance; the loss of turnover only where machinery breakdown is insured as a peril on the business interruption cover. At a garage that is more often relevant than fire, because equipment is used intensively and is tied to inspection intervals.
What is not included
Damage to customers' cars in your workshop, to your trading stock and to test-drive vehicles falls under the motor trade insurance and not here. Also excluded are soil contamination at the oil separator, withdrawal of an approval, lower used-car sales because of the market, and penalties for late delivery. Digital failure of your planning system or of the manufacturer's database likewise gives no right to payment without preceding material damage.
What does your premium depend on?
Balance between workshop and sales turnover. Workshop hours carry a higher margin than car sales. That balance determines the insured gross profit.
Presence of a spray and drying booth. Spray work raises the fire load and lengthens the repair and permit time after damage.
Number and type of work stations. The more turnover depends on a single lift or alignment bay, the greater the interruption risk.
Delivery time for replacement equipment. A standard lift is delivered quickly. A booth or a tyre machine requiring installation takes considerably longer.
Insuring machinery breakdown as a peril. Cover for interruption after a technical defect widens the policy and feeds through into the premium.
Fire prevention in the workshop. Storage of batteries, tyres, paints and gas bottles and the presence of extraction weigh in acceptance.
Insurers weigh these details differently. That is where your saving is.
How we arrange it
You request a quoteWe take stock of your activities, turnover and wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
No. Customers' vehicles in your care, test-drive cars and your trading stock belong on the motor trade insurance. Business interruption insurance pays nothing for those vehicles themselves. What this policy does is pay your lost gross profit in the period in which fire or water damage leaves you able to put fewer cars through the workshop.
What if only the lift breaks down?
A technical defect without fire or water is not an insured peril on standard business interruption cover. The repair runs through machinery breakdown insurance, and the interruption that goes with it only where machinery breakdown is expressly insured as a peril on the business interruption policy. For a workshop that runs on a few lifts, that extension is often more important than a longer indemnity period.
Can I carry on working at a fellow garage for the time being?
In reality often yes, but not simply under your own APK or manufacturer's approval. That is tied to the premises and the equipment at your address. The business interruption policy pays the additional costs of moving elsewhere only within a limited additional costs section. If you want those costs covered in full, separate additional costs insurance is the route to take.
How long should the indemnity period be?
Work back from the moment you are running at full workshop occupancy again, not from the handover of the building. That includes demolition, rebuilding, installation and commissioning of equipment, the restoration of approvals and the time in which regular customers return who have meanwhile had their servicing done at another garage.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
You will find our licence, KvK and Kifid details and our complaints procedure at the foot of every page.
