Are you looking to start a car dealership in the UAE? When it comes to operating a car dealership or a car showroom in the UAE there are a lot of risks. To protect your operations and customers alike it is essential that all dealerships have the required insurances. That brings us to the question, what are the required insurances for car dealerships in the UAE?
EasyCars has put together a list of the 10 key insurances that all car dealerships in the UAE should have to safeguard from any unplanned and unforeseen issues.
Let’s get into it!
1. General Liability Insurance
The first and arguably the most important insurance coverage that all businesses in the UAE need is General Liability Insurance. General liability insurance in the UAE protects dealerships against any claims from third parties or customers due to any injuries or property damage that may have occurred in or on the car showroom. For example, if a customer slips in the showroom and accidentally damages a vehicle, general liability insurance will cover this.
It is important to note that General liability insurance in the UAE is often mandatory for businesses operating physical premises.
2. Commercial Property Insurance
In a car dealership in the UAE, there are multiple high-value assets, for example your luxury cars for sale, spare parts, computers, and the showroom itself. Commercial property insurance in the UAE covers all the physical assets in your car showroom from risks such as fire, theft, and natural disasters.
3. Vehicle Inventory Insurance
A car showroom's inventory is the core of all operations. Another vital insurance that all car dealerships in the UAE should consider taking out is Vehicle inventory insurance. Vehicle inventory insurance in the UAE is a specific insurance that will cover damage to vehicles in events like accidents, natural disasters, and theft.
4. Workers’ Compensation Insurance
Another key insurance that dealerships in Dubai should take out is Workers' Compensation Insurance. Workers' compensation insurance in the UAE protects employees and offers compensation for medical expenses and lost wages if an employee has been injured on the job. For example, if a dealership sales team member injures themselves during a test drive, workers' compensation insurance will cover the associated costs.
5. Professional Liability Insurance
Professional Liability Insurance in the UAE, also known as or referred to as errors and omissions insurance, covers claims from individuals against a car showroom as a result of a professional mistake or negligence. For a car dealership in Dubai, this could mean protection against claims from clients who allege they were misinformed or misled about a car they purchased.
6. Cyber Liability Insurance
A key insurance that has become essential over the last 5 years is Cyber Liability Insurance. Small businesses around the world are constantly being targeted by scammers attempting to access customer data. Cyber Liability Insurance in the UAE protects car showrooms in the UAE against data breaches, cyber-attacks, and other digital risks. This type of insurance will cover the costs associated with a breach including data restoration, legal fees, and customer notifications.
7. Business Interruption Insurance
Unexpected events will happen when running a car dealership in the UAE. Unexpected events like fires, floods, or natural disasters could force dealerships to pause trading temporarily. Business interruption insurance in the UAE will compensate and cover lost income during a business interruption period. This insurance is vital as it will help cover fixed expenses like salaries.
8. Garage Liability Insurance
For dealerships in the UAE that offer car services and repair options, it is essential that they have Garage Liability Insurance. Garage Liability Insurance in the UAE covers claims of injury or property damage that occur in the dealership's service and workshop area. One of the biggest benefits of Garage Liability Insurance in the UAE is it offers protection against potential damage caused to vehicles that are being serviced or repaired.
9. Product Liability Insurance
A key insurance that all dealerships in the UAE should take out is Product Liability Insurance. Product Liability Insurance in the UAE is relevant for all dealerships, particularly if you sell both new and used vehicles. Product liability insurance covers dealerships from events like if a sold car by the dealership is found to be defective and could lead to an accident.
10. Crime Insurance
One of the biggest risks to car dealerships is they are exposed to crime due to their high-value inventory. Crime insurance in the UAE covers losses resulting from criminal activities, including employee theft, fraud, and vandalism.
Final Word
Running a car dealership in the UAE comes with many risks. To protect your dealership from any associated risks, it is important that all the correct insurances are taken out. The 10 insurances presented in this piece are vital for operating a car dealership and car showroom in the UAE and will help protect from any unforeseen events.
We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.
DISCLAIMER – The content within this blog does not constitute professional advice and is intended to be general in nature. Please consult with all relevant parties prior to making any decision.
About EasyCars,
EasyCars by Jeal is a UAE Motor Industry Specific, Dealer Management Software that automates the daily tasks of running a motor dealership. Using the latest technologies, EasyCars removes frustrations experienced at the dealership - opening the doors to future growth.
EasyCars features include Simple Stock Management, Automated Advertising, Automatic VAT Calculations, Xero Accounting Integration, Facebook Automotive Inventory Ads, Dealer Websites and Business Reporting in the one central management software.
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