Whether for technicians or customers, motor vehicles always involve some risk of a serious injury or death occurring. But even without an injury, other types of large claims are possible.

Here are three headline-grabbing claims made against aftermarket businesses and what can be learned from them.

Auto Technician Killed

The death of an auto technician at a Michigan dealership led to a complex legal situation and a family’s wrongful death claim of $15 million. The incident happened in 2020, when the owner of a 2019 Jeep Wrangler brought his vehicle in for a routine oil change and tire rotation. The technician had just completed the service and was kneeling down in front of the vehicle when a junior technician started the vehicle and cause it to lurch forward killing him.

With only two months on the job, no driver’s license and no training, the new employee did not know the danger of letting off the clutch pedal on a manual transmission vehicle in gear without a foot on the brake. Due to an unusual state law, the family of the technician was left with little recourse other than to sue the vehicle owner, who then had to sue the dealership to obtain indemnity.

The Takeaway

Employee training saves lives. While it is impossible to prevent every accident that occurs in an aftermarket business, many lives can be saved with additional training. While the time and resource investment that can go into worker training is not insignificant, the benefits are many.

Employees who receive adequate training are more likely to stay with the company, benefiting retention. They also report higher job satisfaction and demonstrate more engagement. For shop technicians that completed training as part of a study, first-year injury rates fell by 33% and remained lower in subsequent years on the job. Such results can reduce your risks and even lower your insurance cost.

Faulty Repair Injury

Faulty repairs made to a vehicle that was later sold led to injuries for the new owners and a $42 million verdict against the Texas shop that did the work. In 2012, a dealership installed a new roof on a hail-damaged 2010 Honda Fit. The manufacturer’s OEM repair procedure called for a combination of tack, spot and plug welds. However, the customer’s insurer dictated that the new roof be attached with structural adhesive and no welds. The car was later sold.

In 2013, the car’s new owners were seriously injured in a highway crash when a Toyota Tundra hydroplaned into their lane. The roof which was supposed to act as a shearing panel separated and the cant rail buckled, trapping the couple inside. The vehicle also caught fire. A jury trial found the dealership liable for 75% of the damages in 2017. The dealership negotiated a settlement with the couple after the verdict. A settlement was also reached with the former owner’s insurer.

The Takeaway

Shops don’t only face liability for repairs that were just completed. You can also face responsibility for a repair months or years after the work is finished, even if the vehicle has since changed hands. Suboptimal repairs are particularly risky. By not following an OEM recommended procedure, you could create an additional liability burden, harm the structural integrity of the vehicle and worsen the outcome if there’s a crash.

This case has had a lasting impact on the aftermarket industry. After the trial, the couple were invited to speak at industry events, including the 2019 Collision Industry Conference. The conference began including an empty chair on stage at meetings representing the importance of the consumer as an industry constituent. “Those families who ride in the cars that our industry repairs should be at the forefront of our thoughts,” explained chairman Jeff Peevy.

Repair Bill Dispute

A disputed repair bill led to a six-figure judgement against a Pennsylvania repair shop in 2021. An elderly customer brought in a 2011 Toyota Camry to the shop for an inspection in January 2020. The shop recommended the engine and transmission be replaced and quoted a price of $31,502. The customer paid the shop to perform the repairs, but was dissatisfied with the cost and the results.

By July, the customer had sued the shop. It was the height of the pandemic and hiring a lawyer proved difficult for the shop owner. The initial court date came and went, and the customer was awarded a default judgement against the shop of $134,000. The award included a return of the initial repair bill paid, plus damages and attorney fees. Though the shop owner later attempted to reopen the case, the judgement was upheld on appeal.

The Takeaway

Good communication and the proper handling of complaints can minimize the risk of scenarios like this one. Extensive repairs should be preceded by a frank discussion with the customer to explain the diagnosis of the problem, the recommended work to be performed and the appropriate expectations for possible outcomes. If a customer requests repairs that fall outside the scope of your services, it’s best to politely decline the work.

If a complaint does arise, a response is crucial. Take all complaints seriously and address them as soon as possible. Take time to understand what went wrong and work to arrive at a solution. If a claim is likely, notify your insurer. Lastly, take note of legal deadlines. In the example, the court told the shop owner he could have requested more time to secure legal counsel before a decision was made against him.

Conclusion

As the examples above indicate, today’s aftermarket businesses face a wide variety of risks from many angles. Both workers and customers can be injured or killed in an accident. A shop can be accused of negligent service and repairs not only immediately after the car leaves the lot, but also years later. Even if no one is injured and no accident takes place, additional risks exist that can cost you thousands of dollars.

The Lockton Affinity Aftermarket Insurance Program offers a unique solution that can help protect you against some of the aftermarket industry’s key risks, including:

  • Technician errors
  • Employee tool damage
  • Customer complaints
  • Tow damage and more

Click here to learn more about the program and solutions for your business.