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At the Car Wash: Take Cover With Proper Insurance

March 1, 2008

5 Min Read
At the Car Wash: Take Cover With Proper Insurance

Years ago, a friend told me we were destined to live in a litigious society. My response was, What does litigious mean? My friend (who didnt embarrass me for my ignorance) explained: Whatever you do, wherever you are, the legal community stands ready to sue you! In short, in our land of good and plenty, no one is safe from legal threat.

Weve come a long way from the 60s era of love and peace. It didnt take long in my early business career to learn that all the lawyer jokes in the world werent meant to be funny; instead, they were intended to put a little icing on an already caustic truism of everyday reality. In other words: The yellow light is on. Time for caution is upon us; hand shakes and good intentions be damned!

Against the Odds

So how do you run a business without running into the law? Those of us who entered business world many years ago didnt realize we would be so vulnerable. The thought of someone targeting us as an easy means to an end never crossed our minds. Even worse is the fact that the lawyer gets paid, win or lose. It doesnt sound fair, but we didnt make the laws; were just obligated to follow them.

The minute you decide to acquire a facility, be acquired, offer a product or service, or engage in anything that involves an exchange of value, you are locked into a contractual legal transaction. If you sign the dotted line without reading and fully understanding, guess what? You could be facing an embarrassing or catastrophic event. Whatever the outcome, its always costly, time-consuming and maddening. Industry is no place for the faint of heart.

When I first got into business, I made deals based on trust and a handshake. This may still be the protocol in some societies, but dont be fooled into thinking you live in such a place. We must live by the adage: A strong defense is a good offense. Having the best protection for you and your business should not be considered a luxury but an absolute necessity.

Insurance to cover every aspect of your business, including liability, fire, casualty, business interruption and health is just the beginning. Every niche business has specific insurance for increased protection. Whether its a car wash, convenience store, self-storage facility or gas station, insurance companies have coverage to protect all angles.

In car-washing, it took years for the insurance industry to understand and tailor products to our needs. Decades ago, owners went to the industry associations for help. Their banning together prompted insurance specialists to focus on protection for car washes. Now coverage has evolved to include other business segments as well.

Here are a few words of wisdom: Shop around, negotiate for the best rates, and read all the fine print before signing on the dotted line for any insurance policy.

Personally Speaking

In addition to insuring buildings and equipment, you need to protect your human assets. Whether you pay staff hourly or by salary, consider providing benefits. Dont overlook the possibility that paying for benefits may positively impact your business if youre able to retain employees longer and spend less on hiring and training.

My car wash employs 40 part-time and salaried workers. We compete against other companies where the core work force is hourly. Many of these companies offer benefits. This year, we searched far and wide for affordable health programs to stay competitive. The health-insurance issue will continue to make life difficult for small-business owners. Unless you already do, providing health benefits for staff is highly encouraged.

You also need a good lawyer. Find one who knows your line of work and can provide the best counsel. Covering yourself from the inevitable is not easy, but its an expensive proposition to ignore. If your business has daily traffic, consider extra precautions. Security cameras, signage and contracts are just the beginning. Customers need to know you wont be easy prey.

Of course, not everyone who comes to your site is looking for an opportunity to take advantage of you; but the truth is it only takes is one bad incident to hurt your business. Thats why digital cameras come in handy and can be your least expensive weapon against fraudulent claims. Should you be victimized at any time, take pictures and document everything. Also train your employees and hold them accountable for damage that occurs while theyre on the job.

If youre a car-wash operator, make sure every vehicle entering your property is checked stem to stern, and be on the alert for vehicles that have a reputation for being problematic. For example, certain models may have trim or certain operational behavior that could put you at risk for damage. Note and discuss anything that could be a potential issue with the driver. If a concern is raised and the customer wont sign a release, dont wash his vehicle.

Although some of this column has been tongue in cheek, I hope the gravity of living in a litigious society will change your thinking. Always watch your back. Moreover, secure your site so you, your employees and customers know youre observing and protecting all who enter. 

Fred Grauer is the president of Grauer Associates and executive vice president, investor market and conveyors, for Ryko Manufacturing Co., a car-wash-equipment manufacturer in Grimes, Iowa. He has made a lifelong career of designing, selling, building and operating car washes. He can be reached at [email protected]

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