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General Liability
General Liability includes multiple items that your auto body shop or auto repair shop will need. The first is any type of bodily injury or property damage incurred by a customer, vendor, or general public. When a customer visits your garage to get a vehicle repaired, there is a chance they could slip and fall and your business would be held liable. Your Auto Garage’s general liability insurance would also cover against lawsuits that arise from your products and completed operations.
Example; Mrs. Brown is picking up her 2010 Chevy Malibu from your Auto Garage that was undergoing routine oil and brake change. While leaving your parking lot Mrs. Brown goes to hit the brake but the vehicle does not stop and runs into your fence causing damage to her vehicle. Your general liability policy would cover the damage to Mrs. Brown’s vehicle due to your completed operations being faulty.
How can auto garage insurance protect you?
Use the yellow hot spots and explore how auto garage insurance can help protect against common risks.
Commercial General Liability / Garage Liability
Risk Factor
Your repair shop may be susceptible to many risks, such as claims due to bodily injury, property damage, personal injury, and more. For example, if a customer accidentally trips and falls while on the premises of your repair shop, you can become exposed to a potential lawsuit and held financially responsible for any injuries that result from the accident.
Solution
Commercial general liability insurance is an absolute necessity for every repair shop. This type of protection provides broad coverage for premises, operations, completed operations and advertising, and personal injury. It will also pay to defend any covered lawsuit or action regardless of its merit. Coverage can be purchased as a separate policy and can be tailored to your specific needs.
Commercial Property Insurance
Risk Factor
When a gas tank explosion causes an uncontrollable fire, your commercial property and everything within it can suffer a significant loss. This can have a detrimental effect on your repair shop business.
Solution
Commercial property insurance can help protect the property your business owns or leases, including things like equipment, inventory, furniture, and fixtures. Whether you own your building or lease your workspace, commercial property insurance can be purchased separately or can be combined with other necessary coverage to protect your business’ physical assets.
Property of Others - Garagekeepers
Risk Factor
The nature of your business means you’re responsible for valuable cars, trucks, and other automobiles. As a repair shop owner, you’re trusted to safeguard vehicles belonging to others. This responsibility brings with it potential liability of being held financially responsible for property damage caused to these vehicles while in your care, custody, and control.
Solution
You should purchase physical damage coverage, referred to as garagekeepers coverage, designed to help you protect your customers’ property and your business in the event that accidents, injuries, or property damage occurs. This protection covers the costs that arise from unfortunate and unforeseeable events, not bad workmanship, faulty parts, or warranties.
Inland Marine and Equipment Floater
Risk Factor
You’re constantly moving your tools from one area of your repair shop to another, exposing your business to potential loss due to damage or theft. And without your specialized tools and equipment, your repair job may come to a screeching halt.
Solution
You can purchase special equipment insurance designed to protect your tools and equipment on the move. The policy will cover equipment for a variety of losses, including fire, explosion, vandalism, theft, collision with other equipment or objects, and overturning.
Workers' Compensation
Risk Factor
If one of your employees receives an injury or becomes ill due to a work-related occurrence, you are required by law to have the proper coverage in place.
Solution
Workers' compensation protects your employees should a job-related injury or sickness occur during the course of employment. This coverage is required by law and may vary by area, so be sure that you understand your obligations for all physical locations where your business operates in and all physical locations where you hire your employees.
Business Auto Insurance
Risk Factor
As a repair shop owner, you have many exposures associated with your business vehicles–owned or leased. With a fleet of cars, trucks, vans, or other types of vehicles used in the course of business, a single accident can potentially put your business in financial jeopardy.
Solution
Business auto insurance provides coverage for vehicles owned or leased by a repair shop and provides coverage for bodily injury, property damage, and other exposures, and could include comprehensive and collision coverage as well.
Commercial Umbrella / Excess Insurance
Risk Factor
Losses and lawsuits are quite common in the repair shop business, and settlements can be substantial. If your business is found to be responsible for damage or injury, you could be facing a large liability loss that exceeds the basic limits of your standard policy.
Solution
You should consider purchasing a commercial umbrella insurance policy which provides higher limits, typically between $2,000,000 and $10,000,000, and often broadened coverages. Coverage is extended over various policies, including general liability insurance, business auto, and directors and officers liability insurance.
Worker’s Compensation
Worker’s Compensation is required by law in most states so if your Auto Garage has even one employee this type of insurance applies. The goal of Worker’s Comp is too avoid a lawsuit against your business from one of your employees due to injury or disease while on the job. For an Auto Repair Garage this could include things like back injury from lifting something heavy, falling from a ladder, or even becoming sick from a chemical used in your shop.
Example; Frank has worked for your Auto Repair shop for over 20 years. In that time he has changed more tires that you can count. This year Frank begins to develop back pain from lifting tires for so many years and it has affected his way of living and performance at work. Frank decides to open a Worker’s Compensation claim against your company that then pays for any medical bills he is incurring as well as reimburses him for some pain and suffering.
Business Owner’s Policy
If your Auto Body Shop owns a building, equipment, tools, or other personal property, you may be eligible for a business owner’s policy(BOP). This type of policy would include both the general liability and coverage for any physical property. Typically a BOP will include some additional endorsements that you could not get on just a general liability policy. If you currently have a separate policy for your general liability and property you should speak with your insurance advisor about a BOP.
Example; somebody breaks into your auto garage and steals a bunch of tools with a value of $10,000. Your business can file the claim through your BOP for reimbursement typically after paying a deductible.
Commercial Auto
A general liability and BOP will typically exclude any liability associated to a vehicle. If your auto repair shop owns any type of tow truck, pickup truck, or courtesy vehicle for customers, you will need to get a separate commercial auto policy. It is important to note that this policy would only apply to vehicles owned by your auto garage.
Example; your auto repair shop owns a pickup truck that you use to plow your parking lot when it snows. While taking the truck to the gas station to fill up you slide on some ice and run into another vehicle. This accident would be filed underneath your commercial auto policy for both bodily injury and property damage.
Garage Keeper’s Liability
Auto repair shops are constantly working on, test driving, and inside of other people’s vehicles. A general liability will not cover any property damage related to a vehicle, and your commercial auto policy will only apply to vehicles your auto garage owns. Because of this you will need a separate coverage called garage keeper’s liability. This policy would cover any damage to a customer’s vehicle while in your care, custody, or control.
Example; while moving a customer’s vehicle around in your parking lot one, of your mechanics accidentally backs up into another customer’s vehicle. Your garage keeper’s liability would pay for the damage to both customer’s vehicles.
Your Agent Matters!
While there are multiple options when it comes to protecting your auto repair shop, you will want to consult with an independent insurance agent to review what fits your needs best. An independent agent can shop multiple different companies to find the best coverage and price for you. America Insurance Agency services Pennsylvania, New Jersey, Maryland, Delaware, and Ohio and would be happy to assist.
Contact us with more questions at 800-283-0500 or nbreece@america-insurance.com.
Let’s discuss your auto garage insurance.
One of our insurance advisors will reach out to you to review your information and present you with the appropriate auto garage insurance solution. There’s no obligation, just good-old-fashioned advice.
America Insurance Agency offers comprehensive auto garage insurance in Pennsylvania, New Jersey, Delaware, Maryland, and Ohio.
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