Posted on May 17, 2014
Repair shops, motor vehicle dealers and service centers all require liability insurance to protect themselves during the course of operations. This legal liability coverage is actually known as garage liability insurance and provides vital protection to business owners from bodily injury and property damage claims.
What is Garage Liability?
Garage liability is, in effect, the same sort of coverage as general liability insurance that most businesses require except that it is specialized coverage for those who sell and repair cars, trucks, motorcycles, RVs or trailers. In the same way that commercial liability offers protection from accidents such as slip and falls or damaged product, garage liability insurance also protects business owners from claims arising from premise and operations as well as products and completed operations.
How is Garage Liability Different than Commercial General Liability?
Another aspect of coverage that differs from standard commercial liability is that garage liability also provides protection for vehicles used during operations. Garage policies also do not cover personal or advertising injuries like general liability. In fact, garage liability is really a hybrid combination of two policies, Business Auto and general liability combined into one. Garage policies have both accident and aggregate policy limits.
Because garage liability is more narrow in scope than the broader protection of commercial general liability, many companies choose to include endorsements to provide additional coverage such as personal & advertising injuries, liquor liability, fire and non-owned watercraft to name a few.
What about Customer Property?
While garage liability coverage protects vehicles owned by the insured business, it does not extend protection to customer cars left on the premises for service or repair. Coverage for customer's property falls under garage keepers' insurance, which is often sold with garage liability to provide more comprehensive coverage to dealers and repair shops; however, it must be purchased as a separate policy.
Garage keepers insurance covers damage to customer property for specific losses such as fire, theft, vandalism, collision or overturn. It can also be written as comprehensive coverage to include all losses except for collision and overturn.
Those companies who need garage liability insurance will often find that garage keepers' coverage is also needed in order to fully cover the business from whatever accident or physical damage may occur. Taking care to protect business assets from lawsuits and claims with the most comprehensive insurance available is a must for every garage operation today.