When Was the Last Time You Reviewed Your Insurance Policies?
By Bob Goldberg, NARDA General Counsel
I suspect that over the years, your dealership has changed. Perhaps you now offer design services, cooking classes, home security or many other adjacent opportunities. Although dealers are always looking to grow their businesses and become more involved with each customer, they do not always make certain their transactional documents and insurance policies keep pace.
Recently, a member telephoned me to discuss a situation he was facing and seek advice. Business was good and the member needed an additional truck to manage deliveries. Instead of buying one, the company rented a truck. In conjunction with the rental of the truck, the member opted for the full insurance coverage. Unfortunately, the retailer would not have called me if the truck had not been in an accident.
The delivery personnel were not familiar with the rented vehicle, and it was larger than the trucks the store owned. The driver approached an underpass, and unfortunately, the truck was larger than the clearance. The top of the vehicle was opened like a sardine can. With repairs and lost rental of the vehicle, the retailer was presented with a bill for more than $11,000.
But that was not a problem, the dealer thought, because he had taken the insurance option in conjunction with the rental. However, a close reading of the insurance terms excluded any use of the vehicle for commercial purposes. Clearly, the vehicle was being used for the commercial purpose of delivering products. Was the exclusion pointed out to him when the vehicle was rented? Is it likely to be enforced between two businesspeople as opposed to a consumer? One must wonder what individual would rent a large truck for purposes other than commercial.
The next response to the demand for payment from the rental company was to review the retailer’s business insurance policy, which covered rented vehicles. However a closer reading of the exclusions eliminated any vehicles over a certain weight. Unfortunately, the damaged vehicle weighed more than the exclusions allowed, and coverage was denied.
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RRetailers, Servicers, Suppliers: A Call for Industry Participation
For more than 75 years, the North American Retail Dealers Association has been the voice of independent appliance, electronics, bedding and furniture retailers. Through education, representation and a host of benefits, NARDA has worked diligently for all retailers.
Here’s how you can help both the industry and your own enterprise: NARDA is now moving forward into new areas and seeks volunteers that can give an hour or less each month to help guide the association. Please indicate your interest and you will be contacted and given more information.
NARDA also is asking you to identify the areas in which it can assist you and your business. Whether it is legislation, education, legal services, publications, repair service or cloud-based services, please indicate which issues are most important to you. The very best suggestions will receive a $100 gift card.
Please express your willingness to volunteer and suggestions to firstname.lastname@example.org.
2011 CODB Survey Now Available
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