Auto Repair Shop Insurance

Garagekeepers Insurance

As an automotive repair shop, or body shop, you need a garage to store the vehicles you work on. Garagekeepers liability insurance covers physical damage to customers’ vehicles stored at your garage. It’ll provide coverage if a car in your custody gets damaged, stolen, or vandalized while in your care. It typically also covers damages caused by collision, extreme weather, or fire.

• Legal Liability: Only pays if you are legally liable. For example, if you damage a customer’s car while performing repairs, test drives, etc. But not if it’s damaged from hail, for example.
• Direct Primary: Pays for any claim while the vehicle is in your Care, Custody, and Control. (Such as damage from storms.)
• Excess Liability: Pays after the customers car insurance is exhausted. This is a good will gesture. You didn’t do anything wrong, but you want to help them out if they do not have enough coverage.

Many auto shops shops choose to purchase Legal Liability. It’s the more popular option. However, if they have a contract with a dealership or rental car company, then they may purchase Primary liability. That’s because they’d rather have all claims paid to keep those big customers happy.

Auto Shop Liability Insurance

General Liability coverage protects you from many of the things that can go wrong when you own a business. General liability protects you from financial loss resulting from third-party bodily injury, property damage, or personal/advertising injury.

Claims examples:

• Bodily injury: A customer is in your garage and slips on an oil slick, breaking their wrist. General liability will cover the medical costs associated with the claim, as well as legal costs should they decide to file a lawsuit.
• Property damage: You’re working under a customer’s hood trying to fix something, and while doing so, you break something else. General liability insurance will pay for the replacement or repair costs.
• Personal/advertising injury: If a customer slaps you with a lawsuit for slander, libel, or copyright infringement, this policy will help cover the fees.

A client visiting you at the repair center is exposed to much more risk than visiting someone they work with at an office park. Auto body shops have more moving parts, more supplies, more equipment, more bodies performing physical labor, you name it. This is exactly why general liability is such an important coverage for repair shops to consider. In any of these situations, GL Insurance could pay your legal bills. And, if you lose the lawsuit, the damages you owe (up to your policy’s limits). Should you get errors and omissions insurance? It’s a policy that many service industries purchase. It protects you from things like failing to recommend a repair that was needed for a vehicle.

Business Owners Policy

If you’re looking for the most bang for your buck, you may want to consider a business owner’s policy, which is commonly referred to as a BOP. BOPs are a packaged policy, combining general liability insurance and commercial property insurance into a bundled deal.

The cost of a business owner’s policy depends on what you do, and what you want to cover. Either way, a BOP is more affordable than buying each of the policies separately. If you’re a smaller operation, you may be able to purchase this package for as little as $350/year.

Workers’ Comp

Many hazards can occur when working in a garage. Smashed hands and crushed feet are just a couple of risks you and your employees face each day. Heavy machinery and vehicles pose a serious risk each day you go to work. That’s where workers’ comp comes in.

If you or an employee gets hurt on the job, auto repair shop workers’ comp will cover medical bills and other related costs.

If you or an employee is hurt to the point of needing time off work, will provide lost wages. The policy also offers recovery and back to work programs. If someone is unable to return to work it may even provide long-term benefits.

Most states require it if you have employees. If you’re just a single mechanic or technician, you may not have to get workers’ comp.

If you are hurt and can’t get back to work, you don’t have employees to rely on to get the job done. Workers’ comp will help supplement lost wages while you take time off to recover. That way, you won’t be at a deficit when you return.

Auto Shop Property Insurance

Also known as business property insurance, this coverage protects all of your tools and inventory required to perform your work while on premises. That means your business property, including the building and its contents, are safe from losses such as theft, vandalism, fire, accidents, and other natural disasters. It may also apply to outdoor signage, landscaping, and fencing.

In the event of a property loss this policy can be endorsed to cover loss of business income.

Business Auto Insurance

If a customer brings their car in because it’s not running properly, odds are you’re going to test drive the vehicle to make sure everything is running smoothly before returning it to them. A business auto policy, protects the employee that drives the car, the customer’s car, and your business in the event an accident should occur.

Hired and non-owned auto insurance provides protection for vehicles your business hires, rents, or borrows for work related purposes. The coverage also protects employees who use their personal vehicle on behalf of your business. For example, if someone runs an errand to pick up some parts, or simply grab lunch for the team, your business is protected.