What type of insurance is mandatory for Colorado motor vehicle dealers?

For Colorado motor vehicle dealers, garage liability insurance is the mandatory type of insurance. This specific insurance provides coverage for liabilities that may arise from the operation of a dealership, including injuries and damages resulting from the use of vehicles within the dealership premises. It is crucial for protecting the dealer against claims stemming from accidents that occur on the lot and during the course of business operations.

In Colorado, having garage liability insurance ensures that dealers can cover bodily injury and property damage claims that could occur as they conduct their business, which may involve test drives, interactions with customers, and other dealership activities that include the use of vehicles. It plays an important role in meeting state regulations and protecting both the dealership and its customers.

While other types of insurance, such as general liability or property insurance, may be beneficial for a dealership, they do not specifically address the unique risks associated with the operations of a motor vehicle dealer. Collision insurance is typically related to individual vehicle coverage rather than business operations, making garage liability the correct and most relevant choice for this context.