The Motorcycle Insurance tips in becoming a Motorcycle Dealer in California
Description of operations
Motorcycle dealers sell new and/or used vehicles and generally provide financing and insurance for vehicle purchasers. Most sell parts and accessories, provide repairs and bodywork, and offer rental and leasing. Some provide towing services. Recreational vehicles are also sold and serviced by motorcycle dealers. Most dealerships purchase new motorcycles directly from manufacturers, financing the purchase through arrangements with either the manufacturer or a bank. Used motorcycles are generally trade-ins from customers purchasing newer vehicles, or from auctions. While a selection of motorcycles may be displayed in a showroom, most are stored in open lots outside the building.
Property exposure
Property exposure comes from flammable paints, lubricants, oils, degreasers, and solvents used in the repair operations. These must be properly labeled, stored and separated. If done on premises, any spray painting should be in spray booths with good ventilation, UL-approved wiring and fixtures, and adequate controls. Welding is often a part of the repair and bodywork operation that needs to be evaluated for proper handling of the tanks and gases and adequate separation from the other operations with either a separate room or flash/welding curtains. Good housekeeping is critical. Greasy, oily rags must be kept in covered metal containers. Work areas must be cleaned regularly and trash removed from the building. Theft is a concern because motorcycles and their parts are considered to be target items. Appropriate security controls must be taken including physical barriers such as chains, fences, or gates, lighting to deter access to the premises after hours, and an alarm system that reports directly to a central station or the police department.
Crime exposures
Crime exposures are from employee dishonesty, forgery or alteration, theft of money and securities, computer fraud, money orders, and counterfeit paper currency. Employee dishonesty is controlled through background checks, inventory monitoring, control of the cash register, disciplined controls, and division of duties. Physical audits should be conducted at least annually. Theft of money and securities prevention requires controls of monies kept in the cash drawers and regular bank drops.
Inland marine exposures
Inland marine exposure is from accounts receivable if the dealership offers credit, computers used to monitor inventory and provide diagnostics, floor plan coverage for vehicles furnished by manufacturers and held for sale, goods in transit, signs, and valuable papers and records related to the manufacturers, vendors, and customers. Backup copies of all records, including computer records, should be made and stored off premises. Motorcycles stored in open lots are particularly susceptible to damage by hail, wind, flood, vandalism, and theft. Lots should be well lighted with chains, fences or gates to prevent access and transport. The more expensive models should be moved inside to the showroom. An alarm system that reports directly to a central station or the police department should be used. Security guards may be appropriate in some areas.
Auto dealer exposure
Auto dealer exposure comes from slips and falls due to public access to the premises and from motorcycle sales and service operations. Floor coverings inside the showroom should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure. Waiting areas should be provided for customers whose motorcycles are being repaired. Customers should not be permitted access to the service area.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the premises is open after dark, adequate lighting and appropriate security for the area must be present. Motorcycles in open lots can pose an attractive nuisance. Chains and fences should be in place to prevent entrance to the dealership after hours.
Automobile exposure
Automobile exposure is high due if employees are provided with the demonstrator model and the test driving of the motorcycles. All employee drivers should have valid licenses with their MVRs regularly checked. All motorcycles must be regularly maintained with records retained. There should be written procedures for personal and permissive use of motorcycles furnished to employees. For test drives, there must be set procedures, such as salespersons accompanying the customers. Repair operations are the major products/completed operations exposures. There should be a check-off procedure in place prior to the release of the motorcycle to the customer to make sure it is returned in good condition. If the dealership rents motorcycles, they should keep a copy of the renter’s driver’s license and proof of insurance. The rental contract should identify permitted drivers and state that unlicensed or minor drivers are not permitted. It should also include a hold-harmless agreement in which renters agree to assume responsibility for the operation of the motorcycle to limit the business’s exposure to only vicarious liability. If a collision damage waiver is offered, the customer’s signature is needed to document whether this was purchased or declined. The customer should also be required to sign a pre-inspection form to minimize disputes when the motorcycle is returned with damages.
Garagekeepers exposure
Garagekeepers exposure is from damage that can occur to customers’ motorcycles left with the dealership for servicing or repairs. Access to these vehicles should be prevented in the same way the company does their own. Keys to customers’ motorcycles should be kept in a locked box, with proper identification required to prevent handing the customer’s motorcycle to the wrong owner.
Environmental impairment exposures
Environmental impairment exposures can be significant due to the presence of underground fuel tanks and the disposal of used oils, solvents and other hazardous wastes from repair operations. All underground tanks and pipes should be routinely tested for leakage. Adequate procedures should be in place and must be followed to prevent any leakage or contamination. Contracts should be in place to dispose of all environmentally dangerous chemicals.
Workers compensation exposure
Workers compensation exposure is primarily from the garage operation. Employees performing maintenance or repair work on customers’ vehicles should be properly trained. Employees can incur injuries from slips, falls, back sprains, strains, and hernias. Test drives, pickup, and delivery motorcycles can result in injury due to vehicular accidents. Hoists need to be inspected regularly in order to prevent falls. The proper use of lifting techniques and of dollies should be encouraged. Safety equipment should be provided. Refueling should be done only in well-ventilated areas to minimize inhaling of fumes. Information regarding chemicals should be available to employees along with early warning signs of problems.
