Identifying and understanding risk management can be a challenge for many business owners.

Risk management is the process of identifying, assessing, and controlling threats to an organization’s capital and earnings. A well-designed process with reliable and systematic policies, procedures, and metrics, which can be measured and managed, lays the foundation for effective risk mitigation — and quite possibly decreased insurance costs.

Car wash operations are unique, and knowing how to proactively approach risk can keep profits in your pocket. There are definite risks associated with operating a car wash, so how can you protect yourself? Understand that organizational complexity to avert complacency will not prevent human error or Mother Nature 100 percent of the time, but it does establish operational guidelines.

Risk mitigation is fundamental to the strategic success of a car wash business. All of the following are actions that mitigate risk: employee training, safety checklists, site analysis, crime prevention, data breach procedures, building and equipment housekeeping/maintenance, obtaining certificates of insurance from subcontractors, business continuity, compliance checks, security and surveillance, the ever-changing auto industry technology, and innovation. Below are just a few examples to get you thinking about ways to improve your current risk management plan.


By maintaining the premises, removing trash, and keeping the lawn and landscaping up, you not only create an attractive environment that invites customers in, but also reduce the chance of trip and falls or unseen accidents due to hazards that were ignored. General housekeeping should be addressed daily.


When new employees are hired or a current employee changes positions, thorough and proper training in all aspects of their job duties is vital. It is also imperative to review procedures on a consistent basis with all employees to ensure quality and consistency goals are being met. Holding monthly or quarterly safety meetings as reminders of protective-safeguard use, chemical-handling procedures, and any other training area is a good idea. This also reinforces that the procedures in place are not optional and can prevent accidents due to carelessness. Proper training for any employee that may drive a customer’s vehicle is vital to a car wash operation. Physical damage to customers’ vehicles caused by an employee is a common and costly problem that could be easily avoided with training and screening of employees selected to hold a driving position.


An accident-reporting procedure should be implemented, and all incidents documented immediately no matter how insignificant. This will provide information you may need to furnish to the insurance company or authorities in case you were not present when the accident occurred. It will also allow you to look back at trends and frequency of incidents. Is a specific employee always involved? Is the same equipment at fault and does it need to be repaired or replaced? Seeing these trends can show where additional measures need to be implemented.


Moving machinery, chemicals, flamm-able substances, and excessive noise are exposures that occur in any workplace at various levels that can be dangerous. OSHA requires that personal-protection equipment (PPE) such as safety eyeglasses, back support braces, gloves, ear plugs, and steel-toed and/or rubber soled shoes be provided. There are other protective safeguards that should be considered as well, including, but not limited to, lock-out/tag-out kits and guards for moving machinery. There are numerous free resources where further information can be found on this topic — is a great place to start. Proper usage can be reinforced in safety meetings mentioned below.


Although the soaps and solvents used in a car wash operation don’t seem dangerous, they are still considered chemicals and can cause harm, especially when stored in bulk. Another OSHA requirement says a Material Safety Data Sheet (MSDS) must be on hand for every chemical on your property. The MSDS contains information about the hazards associated with the chemical as well as first aid information should an incident with the chemical occur. Each employee should know where the MSDSs are located and be familiar with the dangers of each product at the wash. This information should be reviewed often and could be incorporated in safety meetings held with all staff. Further, if chemicals are transferred to secondary containers, those containers should always be labeled so the contents can easily be identified in case of an accident. Disposal instructions should also always be followed to protect the environment. Visit for additional information on this topic.


While it may seem obvious, having necessary signage visibly posted can help prevent accidents that can happen to anyone who may be on your property, whether an employee or customer.

Caution signs for slippery surfaces, instructions for entering the tunnel, reminders to wear protective equipment, or warning signs near hazardous chemicals and machinery are all examples


The installation of a surveillance or security system at your car wash will have upfront costs that will vary depending on the level of sophistication of the system you choose. A system of any level should be a deterrent to thieves or vandals and an ideal way to document the details of an incident. Evidence can be used in determining and identifying the responsible party.


From skimming devices installed on credit card readers to hackers gaining access through malware on point-of-sale equipment — car washes are an easy target for cyber criminals as more transactions and information goes online, increasing the risk for compromise. The web interface provides car wash owners access to the business side of their operations, and technicians the ability to adjust the mechanical parts of the actual car wash equipment, but this can also be a backdoor for a hacker to not only obtain customer information, but also create chaos by disrupting the normal mechanical equipment operations causing damage to customer vehicles or opening and closing bay doors. Cyber security software, security monitoring, strong passwords, and defensive measures aid in protecting you and your customers.


Employment Practices Liability Insurance (EPLI) is a type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under EPLI include the following: wrongful termination, discrimination, sexual harassment, and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. The policies cover directors and officers, management personnel, and employees as insureds.

Most companies know that having an employee handbook that outlines expectations and consequences for workplace behavior, as well as clear policies and procedures for handling a complaint, are the best ways to mitigate the risk of a lawsuit.

Education and training are key. Owners and managers should stay up to date on the legislative changes happening in their city and state, to determine if those changes will impact their risk exposure. Training employees thoroughly and regularly on employment law and on workplace policies regarding harassment, discrimination, and ethical behavior in general can help to prevent problems.

Managers and/or the HR team should also know when and how to investigate if an employee reports feeling discriminated against or harassed in any way at work.


As a first step, hire subcontractors with a proven, successful track record by effectively screening them before establishing a contract. Require and review certificates of insurance in addition to requesting all agreements include an indemnification clause. This ensures the subcontractor is financially responsible for potential liabilities. A contract agreement should identify the scope of work, subcontractor responsibilities, time frame, cost, and insurance requirements. Any change order requests need to be agreed upon in writing and signed by both parties. Avoid verbal agreements. Pay close attention to red flags:
• Low limits of liability (less than $1,000,000)
• Workers Compensation Experience Mod is higher than a 1.00
• OSHA citations


A company culture should encourage and reinforce compliance of all company policies and procedures.

If you learn how to apply a systematic risk management process and put into action the core five risk management process steps, then your business operations will run more smoothly and be a positive experience for everyone involved.

The Five Steps of Risk Management
• Identify the Risk
• Analyze the Risk
• Evaluate or Rank the Risk
• Treat or Respond to the Risk
• Monitor the Risk

Risk Management Integration Provides Positive End Results
• Protect assets
• Reduce loss costs
• Improve operating margins
• Contribute to economic growth
• Reduce the risk of business interruption
• Preserve a positive public image

If you have additional questions, which are not covered in this article, seek the expert advice of an industry specific insurance agent/agency who understands the complexity and exposures of car wash operations. An agency with the necessary tools and resources along with a risk assessment of your car wash business operations can provide a starting point to assist with risk mitigation and the continued success of your car wash.


Kimberly Grizzle, AAI is The Insurancenter’s brand marketing and business development strategist. Based in Joplin, MO, The Insurancenter is the largest writer of car wash insurance nationwide since 1986. You can visit the company on the web at or call (800) 444-8675.