Garage and car businesses tend to be exposed to a wide range of risks and hazards. One way to protect the owner’s interest is by buying essential insurance products, such as garage liability insurance. Repair shops, dealerships, and service stations are just a few of the businesses in the automotive sector that can benefit greatly from garage liability insurance. It is a specific type of insurance that insures against operational risks.
This type of insurance protects against claims about accidents, property damage, and other mishaps that could happen on the company’s property or as a result of operations. To minimize financial losses and guarantee legal compliance, garage owners must possess sufficient liability insurance due to the growing number of vehicles on the road and the inherent dangers involved in the services they provide to car owners.
What Is Garage Liability Insurance?
Garage liability insurance is designed for individuals who manage a garage or car-related business. This type of insurance typically covers property damage and accident injury caused by a wide range of risks in the garage or repair shop. In a situation where an unexpected accident occurs and leads to severe injuries or property damage, the garage liability policy will cover all expenses related up to the policy’s limit.
What Does Garage Liability Insurance Cover?
Essentially, garage liability policy covers claims related to injuries and property damage caused by a third party. If you seek additional coverage for injuries to your employees, you should purchase workers’ compensation insurance.
- Injuries: As said before, garage liability coverage only covers injuries that were caused to others within the premises of the garage or repair shop, this does not include your employees. If you are also being sued because of an accidental injury, garage liability coverage provides coverage for legal costs and settlements
- Property Damage: For property damage, a portion of your policy will cover situations where you accident caused damage to someone else’s property. It also includes coverage for legal costs and selection if you are sued for property damage by the affected individuals
- Products-On Completed Operations Coverage: This cover is essentially designed to cover damage that was incurred as a result of faulty repairs or defective parts on the vehicle. It provides coverage for damage done after the work on the car is completed.
What Is Not Covered By Garage Liability?
There are certain exclusions in a garage liability policy; it won’t provide coverage for the following
- Intentional acts.
- Damage to your work vehicles
- Employee’s injury.
- Customer property.
- Business property.
Always review the content of your policy’s document to have a better understanding of what is covered, as well as the limitations of your policy. If you need to clarify something or you need additional coverage, you can discuss several options with your insurance company.
Who Needs Garage Liability Insurance?
If you own a garage, repair shop, dealership, or service station, purchasing garage liability insurance may be an ideal option for you. Here’s a list of other type of businesses that should get garage liability insurance;
- Body shops
- Customization shops
- Oil change shops
- Smog test shops
- Parking garages
- Auto Dealership
- Auto dealers
- Auto repair shops
- Detailers
- Muffler shops
- Towing or impounding lots
- Auto glass installers
- Emission testing centres
- Valet services.
If you own a small business in the auto industry which is not mentioned in the list above, you can also purchase garage liability insurance to insure your business from potential risks and loss.
How Much Does Garage Liability Insurance Cost?
Several factors influence how insurance companies will charge you for a garage liability insurance policy. The cost of garage liability insurance typically depends on;
- The type of business you’re insuring.
- Location of the business.
- Claim history for the business.
- Type of coverage you want.
- The deductible amount.
Most insurance companies will also take a look at how long you have been running the business, to assess the risk involved and also to determine if you will be charged higher or lower premiums.
What Is The Difference Between Garage Liability Insurance And Garage Keepers Insurance?
While garage liability insurance provides coverage for property damage and severe injuries caused to a third party, aside from your employees; garage keepers insurance only provides coverage in a situation where a car was damaged while it is in your care.
If you run a parking garage business and a customer’s car was damaged by someone else, the gatekeeper’s insurance will cover all expenses related to the repair or replacement of damaged parts. It also provides coverage for fire, theft, accidental, and nature-related damage.
FAQs
How can I determine the right amount of coverage?
When choosing a coverage option for garage liability coverage, the type of coverage level you choose should be determined by your business needs and financial objectives. Factor in your risk exposure, the size of your company, and the number of vehicles managed by the business. If you are still unsure about what to do, you can speak to an insurance agent for more guidance.
Does garage liability insurance cover employee injuries?
No, garage liability policy does not provide coverage for employees’ injuries or illnesses. If any of your employees were severely injured while working, you can refer to your workers’ compensation insurance policy.
What should I do if I receive a liability claim?
To guarantee that the matter is handled appropriately, notify your insurance company immediately. It is also advisable to keep a record of pertinent information that can aid the claim process for your insurance company.
