If your business handles customers' vehicles, then you need Garage Liability insurance in addition to your standard General Liability policy. For example, if you operate a repair shop, car dealership, tow truck service, or a service station, a Garage Liability policy will protect you from claims arising at your location as well as those occurring off the premises, from work you have completed.
Garage Liabilty Insurance Coverages
The basic Garage Liability policy helps cover injuries that occur at your shop. For example, if your customer slips and falls while trying to walk through the repair bay, this insurance policy will pay for their medical expenses (up to the specified limit of course).
Most policies also cover liabilities arising from your general business operations, such as discrimination lawsuits from your employees. There is an employee dishonesty portion in the policy that helps pay your customer if an employee steals or vandalizes their car.
Garage Liability insurance also covers any products that are manufactured or sold by yourshop. This means property damage that results from faulty parts that were installed in your customer's vehicle is covered. If your employees drive a company car off your premises, you will need commercial auto insurance (link) as well. This may be included in the Garage Liability policy or may require you purchase an additional endorsement.
What about Customer Property?
While Garage Liability protects vehicles owned by your business, it does not provide protection for a customers’ cars left at your shop for service or repair. This type of coverage for customer's property can be obtained through what’s called Garage Keepers' Insurance, which is usually sold together with Garage Liability as a separate policy.
Garage Keepers’ Insurance covers damage to your customer’s property caused by fire, theft, vandalism, collision or overturn. It is a must for any garage operation to make sure to protect their business’ assets from any lawsuits and claims with the most complete insurance policy available.