Automotive Risk Management Partners ARMP

How ARMP's Insurance-Backed Compliance Program Protects Dealers

Terry Dortch President, Automotive Risk Management Partners

Key takeaways

  • ARMP carries an insurance policy and makes the dealership a named additional insured under that policy.
  • This structure is designed so that if a dealership is sued over a compliance issue, it is protected without having to pay out of pocket.
  • Many compliance companies use a hold harmless clause in their contracts instead of insuring the dealership directly.
  • Dealers should review their compliance vendor contracts, especially near contract renewal time, to check for hold harmless language versus actual insurance protection.
  • Terry Dortch states that ARMP offers better coverage at a lower price than vendors relying on hold harmless clauses.

Summary

Being enrolled in a compliance program is not the same as being financially protected if a claim or lawsuit actually happens. This video looks at the insurance backing behind a dealership compliance provider and why that detail matters more than the marketing around it. Many compliance contracts include a hold harmless clause, which shifts risk and potential costs back onto the dealership rather than the provider, even though the dealership is paying for protection.

Dealership principals, GMs, and F&I directors are urged to pull their current compliance contract, especially near renewal time, and check whether they are named as an additional insured on the provider's actual insurance policy or simply covered by a hold harmless clause. Automotive Risk Management Partners structures its program so dealerships are named additional insureds on its policy, meaning claims are handled without the dealership paying out of pocket. The practical takeaway is to compare real coverage, not price, before renewing any compliance agreement.

Transcript

Introduction to compliance program protection

Hi, my name is Terry Dortch. I'm with Automotive Risk Management Partners. I'm here today to talk to you about how you're, how well you're protected in your compliance program.

ARMP's insurance policy and additional insured status

Here at Automotive Risk Management Partners, we carry an insurance policy. That insurance policy then is transferred to you. You become the named additional insured on our policy. We make sure that if there's a problem and you're in a situation where you're, you're sued, you're protected with our program. We developed the program to make sure that if anything happens, you're not putting money out of your pocket.

Comparing coverage and cost to other vendors

Take some time to make sure that the compliance company you choose also affords you that same protection. If they're not, why are you spending more money with them? We're going to provide you with much, much better coverage at a lesser price.

Reviewing contracts for hold harmless clauses

Take the time, make sure you're investigating and checking out, especially now if you're coming up to your contract renewals, things like that. Take a few minutes and just take a look at what your contract is. Most of your companies out there have a hold harmless in them. We don't. Take the time and make sure that you're doing business with somebody that's going to take care of you when the chips are down, not just when things are good.

Closing and contact information

If you have any questions, you want to talk about it, information is on the screen. Feel free to give us a call. Thanks. Bye.

Questions this video answers

How does ARMP protect dealerships if something goes wrong with compliance?

ARMP carries an insurance policy that is transferred to the dealership, making the dealership a named additional insured. This means that if the dealership is sued, it is protected under that policy and is not required to pay out of pocket.

What is the difference between ARMP's protection and what other compliance vendors offer?

Most compliance companies use a hold harmless clause in their contracts rather than insuring the dealership. ARMP does not use a hold harmless clause and instead provides insurance coverage directly to the dealership, which the speaker says offers better protection at a lower price.

What should I check in my compliance vendor contract before renewing?

Dealers should take time, especially near contract renewal, to review their compliance vendor's contract and check whether it contains a hold harmless clause rather than actual insurance protection for the dealership.

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Covered in this video

  • Compliance vendor insurance coverage
  • Hold harmless clauses
  • Named additional insured status
  • Vendor contract renewal review