If you own an Automotive Repair Shop, Body Shop, or you may own a New or Used Auto Dealership you probably already recognize that your business has different insurance needs than other business types. You may just be getting started as a business owner and really don’t know the risks associated with your business. We work with established garage shops as well as new ventures. Many small business owners don’t realize what risks they have until after a claim and then it may be too late to change the policy to reflect the unique needs of your business.
If your business deals with the repair, sales, or storage of motorized/non-motorized vehicles then you most likely need a Garage Liability Policy. Keep in mind motorized/non-motorized vehicles can include more than private passenger automobiles and trucks. The sales, service, or storage of Boats, RV’s, Travel Trailers, Utility Trailers, and Mobile Homes can all bring about the need for a Garage Liability policy. In some cases, Garage Liability can be purchased in addition to a General Liability policy. However, most companies who write Garage Liability Insurance today have a Package Policy or Business Owners Policy that builds in all the coverage you need to protect your garage business. As an Independent Agent, Jack Bradley Agency represents many companies that offer the specialized coverage needed for most garage owners.
The first section of the Garage Policy is typically premises liability. This part of the policy takes care of the slip and fall type accidents that may occur on the premises. The premises liability will respond to bodily injury and some types of property damage claims for customers visiting the premises. There are many options when it comes to liability limits and we would recommend a careful review with your agent.
The next several coverages are what set the Garage Policy apart from a standard business liability policy. A garage policy will cover the products and completed operations of the garage operations. This means repairs that are made and parts sold are covered after service has been rendered and the vehicle leaves the premises. A good example of a claim situation would be when an owner or employee leaves the oil drain plug out of the car after an oil change. The client could leave the shop thinking the oil change was done properly, and suddenly the engine locks down and the vehicle is no longer able to move. The shop owner’s garage liability would respond in this case because the employee was negligent and caused property damage to the customer’s vehicle. Coverage for a customer’s vehicle while being test driven, or vehicles owned by a dealer and used in the business can be included with most garage policies. It’s important to share all elements of your business with your agent so proper considerations can be given when selecting the right coverage. Some companies may require a commercial auto policy along with the Garage Liability to extend coverage to the vehicles while on the road.
There is a lot of confusion when it comes to the difference between Garage Liability and Garage Keepers Coverage. The thing to keep in mind is that the Garage Keepers section covers the physical damage to vehicles owned by someone other than you the garage owner. The Garage Keepers limit is separate from the Garage Liability limit and must be specified on the policy. It covers vehicles left with the insured while repairs are being made. If a vehicle is in the care, custody, and control of you the business owner, you can be found responsible for physical damage to the vehicle left in your possession. There is a requirement with this coverage called co-insurance. It means that you the shop owner must carry a Garage Keepers limit that’s close to the actual value of the vehicles that are left at your premises. If a claim occurs, the insurance company can penalize you the shop owner for not insuring to the proper limit when the claim is settled. This section of the policy also needs to be discussed in detail with your agent to avoid any confusion at claim time.
This refers to the physical damage coverage provided by vehicles that are owned by you the auto dealer. Whether you are a used car dealer or franchised new car dealer, the Dealers Blanket is very important. Vehicles you own are covered in this section for things such as hail damage, vandalism, theft, fire, and many other causes of loss. Once again there is a Co-Insurance clause and the vehicle inventory limit should represent the value of all of the vehicles owned. For example, if a car dealer has 800K in inventory but only has a Dealers Blanket limit of 400K there would be a 50% penalty in the event of a loss for not insuring to value. This is another limit that needs to be discussed in detail with your agent to make sure coverage is sufficient.
Garage policies can be customized and can vary greatly from company to company. Many carriers offer a Garage Liability Policy and use different methods for determining your rate. Some companies base their premium on the number of drivers or employees and some will base rates on payroll and sales. Your employee count and sales numbers allows the company to offer different rates to different garage owners. Companies are trying to find a way to capture the amount of risk or chance of loss that you may have that’s specific to your operation whether it be from the service or the sale of autos, boats, RV’s, or trailers. The Garage Keepers and Dealers Blanket limits of the policy will vary depending on how much coverage you need. Every garage business is different and every policy needs to be different. Spend time with your agent learning important coverage options that can be added. Some of the coverage options you may wish to consider are professional liability, business income, employee tools, false pretense coverage, employee dishonesty, and employment practices liability just to name a few. Discussing your options with an agent who knows and understands garage liability will always be the best option.
Jack Bradley Agency has been specializing in garage insurance for over 50 years. We have many companies to choose from and are able to find the policy that is the best fit for you needs. We understand every garage operation is different and each owner has their own unique set of needs. Whether your garage has been in business for generations or if you are just getting started we would like an opportunity to help and protect you.
Give us a call at 706-778-2136
And of course, we offer the traditional office visit if you would prefer to stop in and meet with us in person.