What Is Garage Liability Insurance?
Let me explain garage liability insurance to you directly—it's a specialty insurance designed for the automotive industry. If you're running an automobile dealership, operating parking lots or garages, handling tow trucks, managing service stations, or working in customization and repair shops, you'll want to add this to your business liability coverage. This policy specifically protects against property damage and bodily injury that result from your operations.
How Garage Liability Insurance Works
Garage liability insurance acts as an umbrella policy that covers the everyday operations of businesses in the automotive field. It adds an extra layer of protection on top of your general liability policy, focusing on bodily injury and property damage from direct garage activities that standard commercial or business liability might not handle.
Before you purchase a policy, make sure it supplements rather than replaces your basic business liability coverage. It will cover injuries to customers while they're on your business grounds, up to the policy limits you choose. Most policies also include an employee dishonesty provision that addresses theft or vandalism of a customer's car by one of your employees. For an extra premium, you can add coverage for autos used in your business, like courtesy vans or parts delivery trucks. You might also get protections for damages from parts or products you sell, or losses from faulty parts installed on a client's vehicle.
Keep in mind, this insurance won't cover your own tools, building, personal items, or business property. It doesn't handle vandalism, stolen vehicles, or damage from things like hail. Accidents or damage to customer cars while they're on-site for service aren't included either. Every policy has maximum liability amounts listed, and there could be aggregate limits per claim or per year.
Commercial general liability (CGL) policies vary in what they cover. They might include premises protection for claims during regular operations on your location, or coverage for bodily injury and property damage from your finished products.
Garage Liability Is Not Garage-Keeper Coverage
Don't confuse garage liability with garage-keepers coverage—they're not the same. Garage-keepers insurance is a separate policy that covers property damage to a client's car while it's under your care. This includes damage during road test drives or while storing the vehicle outside working hours. It also covers vandalism and theft of the customer's car. If your business has multiple locations, you'll need policies for each one.
Other Business Insurance Products
You might need to purchase coverage for other risks in your business as well. Employment practices liability insurance handles claims related to sexual harassment and discrimination. Professional liability coverage protects against negligence claims from mistakes or failures in performance. Property insurance covers your equipment, signage, inventory, and furniture in cases of fire, storm, or theft, though you'll need extra for floods or earthquakes. Business interruption insurance compensates for lost income when events like extended power outages stop your normal operations. Workers' compensation insurance is required for employers; it protects employees by covering medical care for injuries, lost wages, and death benefits to a deceased worker's family. Finally, you can add other companies or individuals as additional insureds on your commercial liability policy—for instance, if your repair garage contracts with a car washing service, they might require you to include them on your garage liability coverage.
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