Garage and Autobody shops have specific insurance risks that other commercial businesses don’t and therefore should work with an agent who understands their needs and the type of insurance they should have.
Types of Insurance for Garage and Autobody Shop Owners – and what they mean
Garage Liability – is a type ofgeneral liability insurance that will protect an automotive business if some type of accident damages or harms a customer’s property during the general course of doing business.
Garage Keepers’ Insurance – fills the gap of the Garage Liability coverage for when damage or harm comes to a client’s vehicle while in the care custody and/or control of the business owner. For example, during a test drive of a clients’ car, the mechanic is in an accident damaging both the client and the other person’s car and causing injuries to the person he/she hit – in this scenario your Garage Keepers’ Liability would cover the incident covering damages to the cars and medical bills.
What’s generally excluded from Garage Keepers’ Insurance?
While all insurance carriers and policies differ, generally most Garage Keepers’ Insurance policies exclude coverage for the personal property of the auto owner. For instance, if a car is in the lot of a garage and the car owner left her laptop and phone in the back seat and it was stolen. The garage keeper’s insurance would not cover the loss, that claim would have to be initiated by the auto owner through their own personal auto or homeowners’ insurance. NOTE: Some carriers offer an endorsement to include customer personal property coverage, but the premiums will usually be higher.
Professional Liability Insurance versus Garage Keepers Insurance
Garage and autobody shop owners should also have Professional Liability Insurance coverage that will protect them against faulty or poor work and or defective parts as these claims would not be covered under your Garage Keepers Policy.
Direct Primary Coverage versus Excess Coverage
Direct primary coverage protects your customers’ vehicles if they are damaged or stolen – REGARDLESS of who is at fault. Includes damage due to vandalism or weather.
Direct excess coverage is less expensive than direct primary coverage and it’s like an umbrella policy or a secondary coverage which will cover losses that EXCEED a customer’s PERSONAL auto insurance policy. This coverage ONLY applies to claims that are legally not the business owner’s fault. For instance, a hailstorm damages a client’s car while at your premises. The client’s PERSONAL auto policy will be the primary, and whatever that doesn’t cover, your Direct Excess Coverage will kick in to cover the gap.
What types of businesses should carry Garage Keepers’ Insurance?
- Stereo or electronic installers
- Auto body and paint shops
- Oil change service shops
- Tire shops
- Towing services
- Windshield repair shops
- Emissions centers
- Auto repair shops
If you have any questions about your business and would like a no obligation review of your current insurance policies, don’t hesitate to reach out to Power Risk Management at one of our three convenient locations:
Chicago Office: 5343 W. Devon Avenue, Chicago, Illinois 60646 | 773-273-8777
Bourbonnais Office: 1410 Argyle Ln N, Bourbonnais, IL 60914 | 815-922-4754
Denver Office: 1400 16th Street, Suite 400, Denver, Colorado 80202 | 720-779-1190