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How much is the cost of #COVID19 to the bodyshop vehicle repairer and #Insurance industry alike?

By 4th June 2020 No Comments

 

The cost involved with COVID and the “RISK” to insurers.

The repairer has a duty of care to both their staff and to consumers. Insurers have a Vicarious liability if acting as the “agent of repair” , ie in authorising a job, they also have a “corporate liability” should the appropriate risk not be established and the appropriate process and ppe provided to overcome the risk. The inherent cost to the bodyshop then come under, Equipment needed to clean the vehicles, the environment that people come into contact with.This includes but is not limited to : parts being delivered, time taken to sterilise boxes bags etc, control of movement of parts, ( a staff member cannot simply pass the part to another staff member) handling of documentation between staff, cleaning of reception and / or any movement of staff in shared premises, staff rooms toilets, light switches , door handles etc… this is an inherent cost to the business, the PPE for each member of staff( the same ppe should not be used the next day) the safe disposal of ppe and risk of any cross contamination.

 

If you have bought equipment to put in a vehicle to sterilise, then this cost needs to covered under the business overheads and charged out. The cost is then, increased amount of labour, lack of productivity as a result of the health and safety act to protect all, as a rough estimate around 3-4 hours per job( this is not for cleaning the courtesy car and consumers car, this is just for controlling the working environment) These are then on top of this, then the cost of ppe per staff member. It must be borne in mind that the vehicle should be wiped down at every stage it is moved, or new covers used.

A Repairer should be charging in the region of £200 + per claim inclusive of vat.

 

As these are now cost bourne by the business in its safe operation,( you cannot repair a vehicle without doing the above or you will be in breach of the health and safety at work act) It becomes an inherent cost involved in repairing a vehicle. Separate from all of this, I would be increasing the labour rate to compensate for the loss in volume of work. Operational cost have increased, whilst volume of work has decreased. My rough calculations for a SME bodyshop is a labour rate around the £100 per hour mark, the smaller the bodyshop, the more efficient it will be. I would still expect a labour rate of £60-70 per hour. For a Huge shop, with £15k -20K a week operating cost…at current volumes of work, the labour rate they would need to be operating at is somewhere in the region of £500-1000 per hour…It is a scary time for those in that situation.

Tim Kelly

Tim Kelly

Tim is a highly qualified Independent Engineer with over 20 years experience as an Engineering Assessor of damaged vehicles.