Garage liability insurance protects business owners if a third party is injured or suffers damage due to business operations in the garage or an accident on the property.
Coverage Under Garage Liability Insurance
Garage liability insurance combines a business auto policy with general liability insurance. The insurance will pay for repairs, medical expenses, and other costs related to an accident or injury in the garage. Most policies of this type include:
- Bodily injury. This provision will cover medical costs if a third party suffers an injury in the garage, such as a broken limb due to a fall.
- Property damage. Damage to a third party’s property, such as a vendor’s cell phone being damaged by falling equipment, will be covered under this part of a policy.
- Products and completed operations. This part of the policy will cover issues that could arise from work completed in a garage, like if a shop mechanic did not properly secure a tire and the customer suffered an injury while driving. In such a case, this type of coverage would pay for the medical expenses.
According to Investopedia, these types of policies cover either the person or business named on the policy as well as their:
- Partners
- Shareholders
- Directors
- Employees
Why Garage Insurance Is Important
If you have a business that performs garage functions, such as repair services, they are likely storing and working on vehicles that can be expensive. These policies can help protect customers’ vehicles and the expense that can come if the vehicles were damaged or stolen while in the garage.
Garage insurance gives the business owner and their customers peace of mind that their vehicle is protected while it’s being serviced. The cost of insurance is significantly less than the cost for theft or multiple vehicle damage stemming from a disaster such as a garage fire.
Some of the main reasons that business owners will pay for garage insurance include:
- Protecting customer property against theft.
- Protecting customers against bodily injury.
- Protecting the shop against liability and financial risks.
Types of Companies That Can Benefit From Garage Liability Insurance
Fitsmallbusiness.com says, there are many types of businesses that can benefit from garage liability insurance, including:
- Auto detailers
- Auto body shops
- Repair shops and mechanics
- Oil change shops and service stations
- Emissions testing and inspection centers
- Auto glass repair shops
- Towing companies
- Parking garages
- Car dealerships
What Protections Should Your Garage Liability Insurance Provide?
Your garage liability insurance should offer protection for your business, your vendors, your employees, your customers, and their property. When finding the best insurance provider, look for:
Auto Service Coverage
Whether your business covers repairs, service, storage, or towing, you want to be sure that all of your operations are fully covered under the policy you choose. This includes disability coverage business-related operations, which will allow your employees to obtain lost wages if they are injured in the course of their work duties.
Vendor Coverage
Your policy should also extend coverage to the vendors you work with. You likely rely on many vendors to ensure the smooth operation of your business. In most cases, these vendors will require you to cover claims that occur while they’re working with you. This means if they are injured during their business dealings with you or suffer damages, the expenses will be covered under your business’s policy.
Garage Liability Insurance Versus General Liability Insurance
CoverWallet states that while general liability insurance covers most liability issues, your business garage liability policy provides specific coverage that an umbrella policy won’t. The way claims are covered will also be different as well. Each protection under a garage liability insurance policy will cover an event up to a given amount. The limits may be based on an aggregate total or calculated per incident depending on the type of claim.
If a claim were to exceed your policy limit, then you would be on the hook for the rest of the expenses, so it’s important to understand the limits and deductibles when choosing a policy. Most general liability policies will cover up to a total cap limit each year instead of specific limits for specific coverages.
There is also a significant cost difference between the two. Garage liability insurance is significantly more expensive than a general liability policy. Premium costs for a garage policy can range from $1000 to $3500, while general liability policies will be between $500 and $1000, as stated in Small Business Chronicle. The reason for the increased cost is that garages pose a higher insurance risk and tend to have higher claim amounts than other businesses.
Despite the cost, most garage owners purchase additional coverage. If you own a garage, you will likely need to add garage keepers insurance and workers compensation, which can carry policy premiums as high as $6000.
Coverage Not Included in a Garage Liability Policy
There are types of claims that will not fall under a garage liability insurance policy. Some claims that are not usually covered include:
- Employee injury. If an employee is injured while performing their duties and incurs medical costs, such a claim would fall under a workers compensation policy.
- Garage damage. Physical damage to the garage building will need to be covered under a commercial property insurance policy.
- Client property. Gatekeepers coverage will need to be added to fully protect client property and customer vehicles being housed in the garage.
Best Providers for Garage Liability Insurance
While many companies offer garage liability insurance, below are some tops ones known for their coverage specialties.
- CoverWallet. This company specializes in coverage for garage owners and auto businesses looking for fast rate quotes.
- Farmers. Farmers specializes in body repair shops and offsite repair centers.
- CyberPolicy. They are ideal for mechanics looking for multiple policies.
- Progressive Commercial. They cover impound and tow lots through their commercial auto and garage insurance policies.
- Liberty Mutual. This company specializes in insuring salvage yards.
Having the proper coverages can ensure that auto shops, garages, tow companies, and dealerships have the liability protection they need to stave off financial disaster.
Check out this guide if you need additional information, resources, or guidance on car insurance.
Sources:
What Is Garage Liability Insurance?
Garage Liability Insurance: Cost, Coverage & Providers
Car Storage Insurance: Everything You Need to Know
What Is Commercial Auto Insurance?
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