What is Motorcycle Dealers-Physical Damage and Liability?
This insurance program helps protect dealerships from financial loss due to property damage, theft, and liability claims. It combines key coverages designed specifically for the risks associated with storing, selling, and servicing powersport vehicles.
Who Needs This Coverage?
Motorcycle and powersport vehicle dealers, including those who sell, lease, transport, or service motorcycles, ATVs, UTVs, snowmobiles, and PWCs, should consider this coverage. It is especially important for businesses with a physical inventory and customer-facing operations.
What It Typically Covers
Dealers Open Lot or Physical Damage Coverage
- Protects inventory from theft, vandalism, fire, collision, and other covered events—whether the vehicles are stored indoors or outdoors.
- Includes collision coverage and optional comprehensive coverage, such as specified causes of loss or fire and theft-only coverage.
Dealers Liability Coverage
- Garage liability combines General Liability and Commercial Auto coverage to protect against third-party bodily injury or property damage claims that arise from business operations, including test drives and customer visits.
Common Exclusions and Limitations
Like most insurance policies, this coverage may exclude or limit protection for:
- Wear and tear or gradual deterioration
- Damage caused by illegal activities or unlicensed drivers
- Losses outside the scope of declared operations or locations
Factors That Influence Cost
Premiums can vary based on several factors, including:
- Type and value of inventory
- Storage conditions (indoor vs. outdoor)
- Location and crime rates
- Claims history
- Selected coverage limits and deductibles
Proof of Insurance and Compliance
Many states and lenders require proof of insurance for operating a dealership legally or securing financing. Always review local and state regulations to ensure compliance with licensing and insurance requirements.
How to Get a Quote
To protect your dealership and inventory, get started today with a customized insurance quote. Request a quote now.
Frequently Asked Questions
What does "open lot" coverage mean for motorcycle dealers?
Open lot coverage protects dealership inventory stored outdoors from risks like theft, vandalism, fire, and weather-related damage.
Is this insurance required by law?
Requirements vary by state, but many lenders and licensing authorities require proof of certain coverages for dealerships to operate legally.
Does this policy cover customer test rides?
Yes, garage liability coverage typically includes incidents involving test rides, as long as the driver is authorized and properly licensed.
Can I customize my coverage limits?
Yes, coverage can often be tailored to match the value of your inventory and specific business needs.
What happens if a vehicle is damaged while being serviced?
If the vehicle is in your care, custody, or control, coverage for damage would typically fall under garagekeepers or liability coverage, depending on the policy.
Still have questions? Talk to a local insurance expert.