Garage liability insurance

Who needs garage liability insurance?

A common misconception about this type of insurance is that it is only needed by those who own an automobile repair shop or garage. While of course this coverage is great for mechanics and auto repair specialists, it is also recommended for any business that works with, sells or transports vehicles. You should definitely consider investing in this type of policy if you are in one of the following lines of work:

• Tow truck operator
• Auto glass installer
• Valet driver
• Detailing operator
• Emissions tester
• Vehicle painter

It is also important for you to consider this coverage if you own an oil change shop, service station, or even a parking garage. Depending on the actual type of business that you run and the specific service that you provide, your policy will differ. For example, if your company simply stores vehicles for customers, you will have different specifications and needs than a business who does vehicle repairs.

What does garage liability insurance cover?

This specific policy covers any claims that result from the general liability risks that come with operating and owning a business. Usually included under this policy are the following:

Bodily Injury

This will protect you if a customer were to injure themselves on your premises. Medical bills and expenses, and any costs associated with lawsuits or legal fees will be covered under this part of your policy.

Product Liability

If you happen to receive a faulty part, and end up installing it into a customer’s vehicle, it could cause major damage. If this were to happen, you would be protected.

Third-Party Property Damage

If a customer’s car or personal property is damaged while they are located on your property, the cost of repairs or replacement will be covered by this part of the policy.

What is not covered under a garage liability policy?

As this is specifically a liability-based policy, it will not protect you against every single risk that could affect your business. Things that this policy does not cover include:

• Machinery – any tools or instruments that you use to do your work will not be covered under this policy. Employee Injuries – if an employee were to get injured while on the job, this policy would not cover them. However, they will be covered if you have Worker’s Compensation Insurance.
• Faulty Workmanship – if damage is caused to a client’s vehicle as a result of an employee’s negligence, this will not be covered.
• Natural Disasters – this policy does not include protection against damages due to fire, floods, hail or earthquakes.
• Contents Within A Client’s Vehicle – any personal property that your customers leave in their cars, such as watches, money, sunglasses and jewellery is not protected under this policy.
• Damage To Your Building – in order to have coverage if your building gets damaged or vandalized, you will have to invest in another policy called Commercial Property Insurance.
• Loss Of Income – in the unfortunate event of you having to close the doors of your business, you will not have coverage for lost income. To be protected against this you will need Business Interruption Insurance.

Garage liability insurance vs. Garage keeper insurance

Many people tend to confuse these two types of policies with one another, or think that both are included together under one larger policy. However, both of these policies are actually separate contracts from one another, and cover your business for completely separate things. Depending on the insurance company offering you the policy, sometimes these policies can be bought in a bundle.

While garage liability insurance protects you against third-party claims of any injuries or damages to property, garage keeper insurance will cover you for the costs of any property damage to a client’s actual vehicle while it is in your care. If your customer’s car is damaged or lost while on your premises, you will be protected against the costs of repairs and replacements.

Garage keeper insurance also covers damages due to things such as natural disasters and extreme weather, theft or attempted theft and acts of vandalism. Another important coverage that this policy includes is protection against collisions or damages while on test drives. Businesses will be protected under this policy regardless of the time of day. This means that whether a damage occurs during business hours, or after-hours while vehicles are simply being stored, you are covered.

How much does garage liability insurance cost?

Garage liability insurance unfortunately tends to be a bit more on the expensive side compared to general liability policies. This is usually due to the fact that working in a shop or garage with multiple tools, contaminants and equipment poses a larger risk for loss than your average business environment does. It is common for businesses in the automotive industry to utilize heavy machinery, sharp tools and hydraulic lifts. All of these things make a worker or customer more prone to injury.

Although risk is a big aspect of the price of a garage liability policy, there are also other factors that are calculated to determine the cost of your insurance. They can include:

• What specific type of business you run
• Your annual revenue
• How many employees you have
• Where your business is located
• How small or large your property is
• How many locations you have

When selecting a level of coverage, most businesses tend to start with $1 million in liability coverage. Depending on the factors mentioned above, this will usually cost you around $300 to $1000 annually.

Why do I need garage liability insurance?

Having garage liability insurance is of the utmost important for those working within the automotive industry in order to be protected against the increased risks of this type of business. One unfortunate injury or accident can cause many repercussions, and can ultimately end up bankrupting a business. Garage liability insurance is in place to provide much needed financial assistance if a liability-related loss were to occur. This will allow a business to continue with their daily operations with minimal disruption.

Garage Liability Insurance with BrokerLink

When it comes to insurance for auto body shops and garages, there is a lot to know. It can be extremely overwhelming and stressful. That’s where we come in!

Have more questions about garage liability insurance coverage? Get in touch with one of our licensed insurance professionals 7 days a week.

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