What is garage liability insurance?
Garage liability is a type of insurance used primarily by the owners of repair shop or the owners of other types of auto services. A garage liability insurance policy typically covers for all the operations related to the garage: bodily injury and property damage resulting from ownership, maintenance and use of the covered vehicles.
A very important distinction needs to be made between the garage liability and the garage keeper liability. Garage liability insurance covers only the vehicles owned by the company and the operations related to company’s employees. For the vehicles that belong to customers of the company, another type of insurance in needed: garage keeper liability. So, to make things very clear:
- Garage liability is needed to protect your company’s cars, your shop and your employees.
- For the other cars in your shop, you need the garage keeper liability insurance policy. This is the policy that will protect the customers’ cars. In case of an unfortunate event such as theft, vandalism, fire, you will get the money to pay back your customers, or they will get the money directly from the company where you signed your insurance policy, only if you have this garage keeper liability.
- When you buy your garage liability insurance policy, talk to the insurer about the garage keeper liability. Some of the insurance companies will add that risk to your main garage liability policy, while others will make another insurance policy.
- You can’t consider yourself completely protected unless you cover those two main risks: the ones related to your own cars and employees and the others related to your customers’ car.
A garage liability insurance policy will not cover, unless specifically included in that policy, your car or the cars of your employees. - Another risk you should cover is related to one of your employees driving the car of one of the customers. During the auto repair process, your employees might need sometime to drive the customers cars to see what’s wrong or if they function properly. During such a drive an auto event may occur; your customer car will be protected, but the physical damage or property damage caused by your employee is not covered unless you have a special section in your insurance policy, called “damage to non-customers vehicles”.
- Another situation you need to cover- a customer hurts him while in your repair shop or your dealer shop. The garage liability doesn’t cover for this risk; what you need is a separate section in your policy, called “other then auto”. This section will cover you if one of your clients suffers an injury while in your shop.
- For those who make a living out of cars, a very good, complete insurance policy is crucial. Make sure you talk to your insures about all aspects of your business- this is the only way to make sure you are covered in all situations.