Looking for Garage Keepers Insurance in North Carolina and South Carolina?
Looking for Garage Liability Insurance?
Garage liability insurance is a specialty insurance policy designed for the automotive industry. The liability coverage is broken into two parts: garage operations other than covered autos (commercial general liability), and garage operations covered autos (commercial auto).
The intent of the policy is to cover third party bodily injury or property damage caused by an accident arising out of garage operations. The policy defines garage operations as the ownership, maintenance or use of locations for garage business. It also includes the ownership, maintenance or use of the autos.
The types of autos covered are defined in Section I of the policy, but for an auto dealer, you typically cover all owned autos.
The definition broadens the scope of coverage by adding a “catch-all” phrase. It states: “Garage operations also include all operations necessary or incidental to a garage business.” This wording is often open to interpretation by insuring carriers.
It’s important to remember, this is a very complex policy that can contain lots of exclusions. Not all insurance companies write this
Who Needs Garage Liability Insurance?
- Auto Dealerships
- Auto Repair Shops
- Towing Services
- Transportation Services
Any business working on or with vehicles should carry garage liability insurance. Even if it is not required by your state, garage liability insurance is a good investment to protect your business.
What other coverages do I need?
Other coverages that are frequently included in the garage liability policy include:
- Broadened Coverage
- Physical Damage Coverage
- Garage Keepers Coverage
- False Pretense Coverage
- Uninsured & underinsured motorist coverage
- Medical Payments
Garage Liability Insurance vs. Garage Keepers
Garage Liability and garage keepers coverage are commonly confused. Garage Liability provides liability coverage for operations and autos and Garage Keepers coverage is an optional line offering protection to the garage business for loss to a customer’s auto left in the insured’s care, custody or control. The policy clarifies that by saying, “while the insured is attending, servicing, repairing, parking or storing it in your garage operations.”
Garage Keepers coverage offers three options:
1. Legal Liability. This is the most common. The protection applies to a customer’s vehicle damaged due to the insured’s negligence – such as the mechanic wrecked the customer’s car while test driving it or the customer’s vehicle was left unlocked and unattended after hours.
2. Direct Primary. This form covers the customer’s vehicles regardless of liability. In a loss caused by no action of the insured such as a weather loss, or a theft although the vehicle was adequately protected, the direct primary garage keeper pays.
3. Direct Excess. This is the rarest option, although it’s the best. The form affords protection to an insured for the loss to a customer’s vehicle regardless of liability, just as direct primary does. The difference is in the event of the insured having no liability, the form will only pay in excess of any other collectible insurance.
What other policies does my business need?
What are some coverage gaps that are caused by just carrying the garage liability insurance policy? As a business owner, you should have the following insurance policies in-force to protect your business:
- Property Insurance
- Worker’s Compensation
- Employment Practices Liability
- Cyber Liability
Have additional questions about garage liability insurance or need a quote? Contact Dealers Risk today!