'Dude, Where's my car -- and are you Insured?'

When you pull up to a restaurant, toss the valet your keys and wander off to enjoy your evening, you probably never give another thought to the misfortunes that could befall your vehicle while it's in the custody of uniformed strangers.

But rest assured that most parking and valet companies are keenly aware of the potential lawsuit-worthy risks of their trade, including physical damage due to valet negligence, personal injury from an accident involving a customer or valet, and vandalism or even theft of a vehicle.

Any operator who hopes to be in business for longer than a weekend wedding carries valet parking insurance or a parking operator's policy designed by insurers that specialize in this custom coverage.

"The majority of parking operators follow the rules," says Kathy Phillips, senior vice president of Alliant Insurance Services, based in Newport Beach, Calif. "The exceptions that try to fly below the radar create a bad name for a good industry."

'Lots' of liability? Here's what's covered

Valet/parking insurance coverage typically includes:

General liability: It covers personal injury caused by a valet (such as when a pedestrian is accidently struck) or parking lot conditions (as in slip-and-fall claims).
Garage keepers' legal liability: It protects against property damage and loss resulting from collisions or vehicle thefts that occur in the insured lot or garage, even if the insured valet company doesn't own the property.
Workers' compensation: It reflects that parking hundreds of vehicles a week and dashing through parking lots can take a toll on valets.

Parking/valet policies are often tailored to fit specific business types, such as self-park lots, shuttle services, special events and on-street (off-premises) parking.

The National Parking Association, an industry trade group based in Washington, D.C., says on its "Insurance coverage checklist for parking companies" that it's typical for operators to carry a minimum of more than $5 million of general liability and $1 million in garage keepers' legal liability coverage.

Insurance is tapped only for the big stuff

To keep premiums in check, many parking/valet operators opt to include a self-insured retention, or SIR, agreement that acts like a per-claim deductible. Operators pay small claims outright and tend to notify the insurer only when a potential claim starts to approach their self-insured limit.

"We have a very high deductible -- $10,000 -- so the door bumps and minor fender benders are always below that, and we deal with those internally," says Brian Haupricht, founder and owner of Park Inc., a parking management services firm based in Charlotte, N.C. "Most of our claims are probably $2,000 to $3,000."

Haupricht says having the leeway to settle small claims in-house is vital to his customer service. "If a claim is due to our negligence, it's covered through us," he says. "We've heard of companies that cut corners or have a standard policy to deny claims first go-round and handle what comes back. That's not the route we take. We try to do things on the up and up."

'Dude, Where's my car -- and are you Insured?'

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