“Our recommendation is to go into any deal and especially a DRP with your eyes open and being aware of the benefits as well as possible negative outcomes of partnering with a carrier,” said Cecil, a 30-year insurance veteran. “Too often the situation involves all of the work business that will be obtained or provided without regard to the contractual obligations or requirements such as: hold harmless, primary non contributory and waiver of subrogation as well as a request that the shop owner provide primary coverage when providing a temporary replacement vehicle or rental.”
Cecil has spent the last 25 years focused on automotive businesses, in particular those in auto service repair and parts businesses. He developed the strategic plan for the ASM Automotive Specialty Markets division of what was then Universal Underwriters. In addition, he has written articles, provided interviews and conducted presentations as well as been a subject-matter expert for automotive businesses.
Cecil recommended reviewing the DRP agreement with legal counsel as well as a business insurance provider. He said the main advantage is that you will be an informed negotiator beforehand and if you elect to accept the terms, you have done so in an informed way. “If changes are communicated subsequently in a casual manner, be sure you discuss and understand the request and what it means to you and the carrier with the DRP,” advised Cecil. “A casual request may not be the correct way to make a change that could have a negative impact on your experience if you are assuming more risk or exposure than you realized.”
He stressed the importance of DRP negotiations. “If the volume of business is what you expect and the relationship is expected to be long-term, you may as well get off on the right foot. A significant dependency on one customer or source of customers can become a problem, if not properly negotiated,” he said.
When asked about garage keepers insurance, he said that most of those in auto service say they have garage keepers insurance even though their description or term for business insurance only describes only a portion of the coverage typically purchased. However, shopowners use their shorthand, calling their coverage "Garagekeepers" as it is an important part of the insurance package as it provides coverage for the shop owners’ exposure for the customer’s vehicle in their care, custody or control.
“The bottom line for garage keepers is that the shop owner work with specialists,” said Cecil. By dealing with someone who is familiar with this area, they can help manage the exposure and explain the options in coverage available. “It is also important to work with carriers and programs that have experienced claims folks who are accustomed to seeing the type of claims shop owners have,” said Cecil.
His firm provides guidance on how to purchase this type of insurance. For more information, contact Gerald Cecil at 913-312-2808 or email Gcecil@arrowheadgrp.com.