Valet Parking And Auto Insurance: What's The Deal?

Valet services do need to have a special type of insurance to protect themselves. Valet parking has become increasingly popular in the United States, with people willing to pay for the convenience of not having to find a parking spot. However, this convenience comes with risks, including accidents, vandalism, theft, and other incidents. To mitigate these risks, valet services require insurance coverage for liability issues, vehicle damage, and bodily injury.

The most common types of insurance for valet services include general liability, garage keeper's liability, and workers' compensation. General liability insurance covers injuries to persons or property damage caused by the negligence of a valet attendant, including hitting a pedestrian. Garage keeper's liability insurance covers damages to vehicles in parking lots under the care of a valet company, including collisions and theft. Workers' compensation insurance provides medical and disability coverage for valets and other employees, as well as reimbursement for lost wages during recovery.

Valet parking insurance costs

The average cost of liability insurance for a small business offering valet parking services starts at around $35–$60 per month. This type of insurance is essential for businesses offering valet parking to protect themselves from financial losses due to injuries and property damage.

Valet parking insurance typically covers liability issues, including general liability and garage keeper's liability. It also includes workers' compensation for valets and other employees. Businesses may also require additional property insurance to protect their physical parking lot, parking garage, office space, or equipment.

To get the best valet parking insurance rates, it is recommended to consult an independent insurance agent who can assess your specific needs and risks and provide quotes from multiple insurance companies for comparison.

Valet parking insurance coverage

Valet parking insurance is a special type of insurance that valet companies need to protect themselves from financial losses in the event of accidents, vandalism, theft, and other incidents. Valet parking services have become increasingly popular in the United States, especially in restaurants, hotels, and hospitals. While this service offers convenience to customers, it also comes with a higher risk of incidents occurring. Therefore, it is crucial for businesses offering valet parking to have adequate insurance coverage.

Valet parking insurance typically covers the following areas:

• General Liability: This covers any injury to a person or damage to their property caused by a valet attendant. It includes direct injuries caused by the valet attendant striking a pedestrian. General liability insurance is not mandatory in all states but is highly recommended as it can protect businesses from heavy lawsuits and fines.
• Garage Keeper's Liability: This covers any damage to vehicles in the parking lot or parking garage that are under the care, custody, or control of the valet company. It includes collisions, theft, and any other type of crime or damage caused to the vehicle while it is in the valet company's control. Garage keeper's liability insurance also covers the owners from the negligence of their employees, protecting them from expensive claims.
• Workers' Compensation: This provides coverage for valet employees in the event of job-related injuries, illnesses, disability, or death. It covers medical expenses and provides reimbursement for lost wages during recovery. Workers' compensation insurance is crucial for businesses with multiple employees.

In addition to the above coverages, valet parking businesses may also require additional insurance policies, such as commercial property insurance, business interruption coverage, and employee theft and crime coverage. These policies can protect the business's physical assets, provide coverage during temporary closures, and safeguard against the costs of employee theft or fraudulent acts.

It is important to note that valet parking insurance does not cover certain situations, such as vandalism, theft, weather-related damage, or the theft of personal items left in vehicles. These instances are typically the responsibility of the vehicle owner's personal automobile insurance.

When considering valet parking insurance, businesses should assess their specific needs and risks and consult with an experienced insurance agent to ensure they have adequate coverage.

Valet parking insurance exclusions

Valet parking services have become increasingly popular at upscale restaurants, hotels, and hospitals. However, offering this service also increases the exposure to risk. Valet parking insurance is designed to protect businesses from financial losses resulting from accidents, vehicle damage, and injuries caused by valet attendants. While valet parking insurance provides essential coverage, there are certain exclusions that businesses and individuals should be aware of.

Vandalism and Theft

One notable exclusion from valet parking insurance is vandalism and theft. If a vehicle is vandalised or stolen while in the valet parking lot, the damage or loss is typically not covered by the valet company's liability insurance. Instead, the guest's personal auto insurance policy would be responsible for covering these incidents.

Weather-Related Damage

Another exclusion pertains to weather-related damage. Unless the customer has specifically paid for covered parking, any damage caused by weather-related incidents, such as windstorms, hail, lightning, flooding, or falling objects, is generally excluded from valet parking insurance. In such cases, the customer's auto insurance policy would be responsible for covering the damage.

Theft of Contents

Valet parking insurance typically does not cover the theft of personal belongings left inside the vehicle. It is recommended that individuals remove valuables from their cars before handing them over to a valet service.

Exclusions for Valet Services

In addition to the above exclusions, there are certain circumstances where the valet company or property owner may not be held liable. For example, if a vehicle is properly parked and locked by the valet staff, and it is subsequently stolen or vandalised, the valet company is usually not held responsible. In this scenario, the vehicle owner's insurance would need to cover the damage or loss.

Furthermore, damage caused by another driver in the parking lot may also fall outside the scope of valet parking insurance. It is important for businesses to communicate these exclusions clearly to their customers to manage expectations and ensure a mutual understanding of responsibilities.

While valet parking insurance provides valuable protection, understanding its limitations is crucial for businesses offering this service. By being aware of these exclusions, businesses can implement appropriate risk management strategies and ensure they have adequate coverage to protect themselves and their customers.

Valet parking safety issues

Valet parking is a convenient service, but it also comes with certain safety issues. Here are some of the potential risks associated with valet parking:

Rough Driving and Car Damage

Valet attendants may engage in rough driving, potentially causing scratches, dents, or even crashes. They may also lose the customer's keys or have items go missing from inside the car. It is also possible that valet attendants take the car for a joy ride without permission.

Inexperience with Manual Transmission

Many valet attendants may not know how to drive a car with a manual transmission. As a result, they may end up learning or practising on the customer's car, potentially causing damage.

Inadequate Security and Theft

Valet-parked cars can be attractive targets for thieves and vandals, despite security measures. This is especially true if customers leave valuables inside their vehicles, making them an easy target.

Accidents and Injuries

Valet attendants, even if they are experienced and safe drivers, are often operating unfamiliar vehicles. This increases the risk of accidents, including colliding with other vehicles or hitting pedestrians.

Weather-Related Damage

Damage caused by weather events such as windstorms, hail, lightning, or flooding is generally not covered by valet insurance. Instead, the customer's auto insurance policy would typically cover such incidents.

Vandalism and Theft Exclusions

Vandalism and theft are usually excluded from valet insurance coverage. These incidents would fall under the guest's personal auto insurance policy.

To mitigate these safety issues, valet services should implement comprehensive insurance coverage to protect themselves and their customers. Additionally, safety standards, driver safety training, careful screening of drivers, and clear communication of policies to customers can all help reduce the risks associated with valet parking.

Valet parking legal requirements

Valet parking services are associated with various risks, including accidents, vehicle damage, injuries, vandalism, and theft. As such, there are several legal requirements that valet services must adhere to.

Firstly, it is important to note that valet parking services are not mandatory for customers, and it is illegal to require customers to use valet parking. Offering valet services increases the exposure to risk, as valets often operate unfamiliar vehicles and may not always exercise caution. Therefore, carrying adequate liability insurance is essential to protect against lawsuits and financial losses. The National Valet Parking Association (NVPA) in the United States sets standards for admissions that serve as industry best practices, and local laws and ordinances also govern the operation of valet companies.

The NVPA requires valet companies to have general liability insurance (minimum $5,000,000), garage keepers' legal liability insurance (minimum $1,000,000), and workers' compensation insurance (minimum as required by state law). General liability insurance covers injury to a person or damage to their property caused by a valet attendant, including direct injuries caused by striking a pedestrian. Garage keepers' liability insurance covers damage to any vehicle in the valet's care, custody, or control, including collisions and theft. Workers' compensation insurance provides medical and disability coverage for valets and employees for job-related injuries or illnesses and reimburses lost wages during recovery.

In addition to insurance requirements, there are other legal considerations for valet services. It is recommended to work with an attorney to draft a clear valet policy and determine how to communicate driver and valet responsibility to patrons. Valet companies should also implement safety standards, including driver safety training, safe driving habits, and protocols for reporting unsafe conditions. Good hiring practices are crucial, including checking driving records, references, and administering integrity or honesty tests for applicants.

Furthermore, customer service is a critical aspect of valet services, as it is often the first impression a customer receives. Implementing a training program that addresses customer service standards and procedures, as well as establishing appropriate employee appearance and grooming standards, can help ensure a professional and courteous service.

While valet parking services offer convenience and luxury, it is important for businesses to understand and comply with the legal requirements to mitigate risks and provide a safe and satisfactory experience for customers.

Frequently asked questions