For any valet company, insurance is a very real and present concern. Along with labor, it’s the major source of overhead for valet company owners. Valet companies can handle millions of dollars worth of automobiles and personal belongings on a daily basis so it’s vital that they be properly insured with valet company insurance.
Last month, Indianapolis Colts wide receiver Reggie Wayne had his Bentley taken on a drunken joy ride by a hotel valet at The Westin Hotel in Downtown Indianapolis. The potential consequences of that kind of employee behavior on a valet company that’s not properly insured can be dramatic.
We’ve heard horror stories from clients as well, including a key box that was left open and unattended and resulted in dozens of keys and one vehicle being stolen. We thought it would be a good opportunity to take a look at some insurance basics for valet companies so if you’re just getting into the Valet industry, you can begin taking the appropriate precautions.
Preventative Measures – Hire Well
First steps first. Before we get to insurance, it’s important to remember that you can take other preventative measures to protect your company.
The first step is to make sure the hiring process is comprehensive and effective at evaluating potential employees records. A background check, credit check, and a seven-year driving record are good choices to ask your potential hires for. If they have all those pieces in place, you’re much more likely to end up with a responsible and reliable employee. It’s also worth asking if they have additional skills that would be beneficial like knowing how to drive stick or any automotive repair experience.
Once you hire you’re employee, you should make sure that they know what they’re doing. That means educating them on dealing with customers, taking care of vehicles, and any specific details on how your company operates. Allowing new employees to go through a training or apprenticeship phase where they work with a more experienced valet is a good program to put in place.
Valet Company Insurance
Even with the best preventative measures, you obviously still need to protect yourself. Valet companies have unique insurance needs. The lines between what exactly each policy covers can be blurry. Below we’ll give some general information, but it’s essential that you discuss the details with your insurance company to make sure you have all the coverage you need to protect your business.
Essential Coverage for Valet Companies
In order to obtain membership with the National Valet Parking Association you’re required to have the following types of valet company insurance, so we’ll be considering those essential.
- General Liability Insurance with a minimum of $5,000,000
- Garage Keepers Legal Liability Insurance with a minimum of $1,000,000
- Workmen’s Compensation Insurance with the minimum as required by law
- All insurance carriers are rated A or higher
General Liability Insurance
For a valet company, general liability insurance protects the company against any damage to a third party owing to negligence. This includes general bodily injury or property damage, but it does not cover any vehicles or property that have been left “in your care, custody, or control.” That means when the customer turns their vehicle over to you, it’s no longer covered by general liability insurance.
Garage Keepers Insurance
Garage-keepers Legal Liability Insurance protects the valet parking company against damage to other people’s vehicles left in their “care, custody, or control” up to a set amount determined by the policy holder. Effectively, it helps to fill one of the obvious gaps left by the general liability insurance policy.
However, Garage Keepers Liability generally does not protect against theft or misplaced items inside the vehicle. You’ll need to set up a custom valet company insurance policy to cover that if you desire.
Workers Compensation Insurance
Worker’s Compensation Insurance provides medical and disability coverage for employees who sustain job-related injuries. A common example would be covering an employee’s medical expenses and a reimbursement of some percentage of lost wages owing to a workplace accident
Some Additional Coverage Options
Employee Dishonesty Insurance protects valet companies from theft or lost items in a client’s vehicle. This fills one of the major apparent gaps left by general liability and garage keepers insurance.
An umbrella policy provides excess coverage for General Liability in an amount specified by the policy. This is an additional measure you can take if you feel the amount covered in the general liability insurance policy is insufficient.
Do Your Research. Talk to Your Insurance Company.
The information given here is meant to be general and a useful starting point for understanding valet company insurance. It is not comprehensive and coverage can vary from provider to provider.
When you choose an insurance provider, we strongly recommend that you select a provider with experience and specific knowledge of the valet industry and that you discuss in detail your insurance needs and make sure they are properly covered.