How to Create an Automotive Aftermarket Risk Management Plan

The automotive aftermarket industry is one of the fastest growing sectors, with reports projecting that the market is expected to grow from $430.51 billion in 2024 to $568.19 in 2032. However, operating within the automotive aftermarket comes with inherent risks.

From cybersecurity threats to product recalls, there are a myriad of exposures that can stall operations. As challenges like changing regulations and the rollout of new automotive technologies take place, it can be difficult to successfully navigate the evolving aftermarket landscape.

In an industry where reliability, quality and customer satisfaction are paramount, having a comprehensive risk management plan is crucial for long-term stability and success. Use these four steps to protect your business from the industry’s biggest threats.

4 Steps to Create an Automotive Aftermarket Risk Management Plan

1. Assess Your Goals

Take a close look at your business and establish clear goals with associated key performance indicators (KPIs). This will help to guide the strategies in your automotive risk mitigation plan and will provide you with a way to actively assess progress. For example, you might set a financial protection goal to minimize unexpected costs due to faulty installations by 40%.

2. Identify Trouble Spots

Once you have formalized your goals, the next step is to identify loss exposures. This encompasses anything that can lead to a financial loss, such as supply chain disruptions, operational risks and theft. Work with your team to create a checklist of business exposures and common risks in the automotive industry, drawing from past experiences and new realities. Once you have completed the checklist, review it with your insurance partner and/or legal counsel.

3. Work with an Experienced Insurance Broker

Once you know what the risks are, look for ways to protect your business. When it comes to keeping your business running smoothly in the event of a loss or a claim, your most powerful tool is insurance. While it might seem like all insurance policies are the same, the wrong coverage can leave gaps that expose your business to unnecessary risks. Insurance is not simply an additional expense you must incur; it is an invaluable asset that will shield you from a myriad of risks.

However, your business has many coverage options to address your unique risks, and it can be difficult to select the most comprehensive, cost-effective solutions. Rather than trying to navigate complex insurance options on your own, work with an insurance broker that is well versed in the automotive aftermarket. The right broker can help you secure policies that offer the best protection for your business and earn you better terms and premiums.

As the leading insurance broker in the automotive aftermarket, RevPro provides personalized solutions to address the specific risks your business faces. Drawing from more than 30 years of industry expertise, RevPro supports automotive parts manufacturers, wholesalers, retailers and installers by providing access to the best coverage on the market, including:

• Automotive Manufacturer and Distributor Liability Insurance: General liability is a significant concern in your high-risk industry, whether you’re signing a lease for a new manufacturing plant or dealing with a product defect. RevPro helps businesses in the automotive aftermarket receive the right coverage to address the everyday risks that come from operating.
• Automotive Product Liability and Recall Insurance: RevPro works closely with businesses in the automotive aftermarket to secure the best terms and ensure they include coverage for costs associated with recalls, such as repairs, replacements and customer notifications.
• Garage Keepers Liability and Garage Liability Insurance: If your business maintains customers’ vehicles or offers test drives, RevPro offers a comprehensive garage keepers insurance program to shield businesses from potential risks and maintain good standing.
• Property Damage Liability Insurance: Your business relies on your facilities and inventories of parts, accessories and equipment in order to operate and make sales. As your business evolves, RevPro offers continuous support so you have the property damage coverage you need to protect against emerging risks.
• Cyber Liability Insurance: RevPro provides holistic cyber coverage that uses broad terminology and protects against a wide range of cyber threats, from malware infections and social engineering attacks to ransomware.

At RevPro, we not only offer tailored coverage to safeguard your business from vulnerabilities, but also help organizations develop the right strategies and initiatives, such as a cybersecurity awareness training program, to stay vigilant and reduce unnecessary risks. The insurance specialists at RevPro will work with your organization to review all applicable coverage options and develop an effective risk management program to aid in the fight against today’s most pressing threats.

4. Regularly Refresh Your Plan

Once your plan is in place, the work is not done. New exposures and changing regulations can take place over time, threatening your business’s continued growth. Regularly review your business’s risk profile and work with your insurance broker and legal counsel to ensure you have the right coverage to address the evolving risk landscape.

Explore How RevPro Can Transform Your Risk Mitigation Approach

RevPro is a national insurance program, built by Alliant Insurance Services, to cover the wide-ranging risks of the automotive aftermarket industry. For more than 30 years, we have proudly serviced a broad array of industry sectors—including parts manufacturers, material suppliers and wholesale distributors—by providing tailored coverage that addresses the unique risks in the industry. As the endorsed insurance broker of the Specialty Equipment Market Association (SEMA), you can rely on RevPro to build a powerful, cost-effective program for your business.

Request a quote today to learn how RevPro can help your effectively mitigate the most pressing threats to the automotive aftermarket.