Auto Repair Shop Insurance

Auto Repair Liability Insurance

Auto body repair shops and mechanics offer a wide range of services. Your garage insurance policy needs to be customized to suit your business’s needs.

Canadian automotive businesses such as auto and collision repair shops, mechanics, garages, and dealerships require a comprehensive liability insurance package to protect themselves from third-party bodily injury or property damage claims.

Zensurance - Auto Mechanic

Partnerships with over 50 leading Canadian insurance providers

Auto Mechanic

Insurance for auto repair shops

Your customers rely on you to repair, service and store their vehicles safely. The care, custody, and control of customer vehicles are your responsibility. If something goes wrong while a customer’s car, SUV, or truck is in your possession (accidents do happen), having customized insurance for an auto repair shop that adequately addresses any unforeseen circumstances is essential to protecting your business.

Auto repair shop insurance is a comprehensive commercial policy that insures car repair businesses, mechanics, and their employees against third-party claims of damages to your customers’ vehicles as well as protection for your company-owned vehicles.

Every auto repair shop is different, and insurance requirements will vary by the services you provide. A comprehensive auto repair shop insurance policy typically includes these coverages:

  • Commercial General Liability (CGL) Insurance: CGL is a liability insurance policy for auto repair shops that protect you and your business against common claims you may run into, such as third-party property damage (damage to a customer’s vehicle) or bodily injuries (if a customer visiting your facility slips, falls, and is injured). Should your business be named in a lawsuit, CGL may cover a customer’s medical expenses and your legal fees regardless of the outcome. However, your CGL coverage limit applies to all employees of your business, not each employee. One option to accommodate all your employees is to increase your limit.
  • Garage Liability Insurance: Garage liability coverage contains special endorsements that covers vehicles in the care, custody, and control of your auto repair shop. It includes third-party liability coverage if your employees need to drive a customer’s vehicle while it is in your shop’s possession.
  • Commercial Property Insurance: Commercial property insurance protects your repair shop, as well as its contents (including your inventory) from insured risks that occur beyond your control, like a fire, theft, or flood. Carrying commercial property insurance gives you the option of getting business interruption coverage, which reimburses the net income lost following an insured event. It may also cover overhead costs, employee wages, and other costs associated with temporarily closing your business. However, business interruption coverage does not cover income lost due to a pandemic, infectious disease, or government-mandated closure.
  • Tools and Equipment Insurance: Your tools and equipment are likely your most important assets, making equipment and tools insurance critical. This policy provides coverage to replace, or repair lost or damaged equipment and tools, accessories, or others’ property in your care. Anything valued at less than $1,500 is considered a tool, whereas anything above is considered equipment.
  • Cyber Liability Insurance: Cyber liability insurance is one of the most critical coverages to have if you’re storing your customers’ data. While your customers will visit your auto repair shop, if you offer customers the opportunity to make a reservation online that requires them to include personal or financial information, it is your responsibility to protect their data. Cyber liability insurance covers costs associated with electronic incidents, such as cyber-attacks on your computing systems.
  • Pollution Liability Insurance: Auto repair shops do have an impact on the environment, and environmental liability is on the rise. Pollution liability insurance covers clean-up costs, third-party bodily injuries (such as a respiratory illness), or damage to a customer’s vehicle caused by pollution or toxic substances produced due to your work.
  • Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, if your auto repair shop provides its customers with advice or consulting services, consider adding professional liability coverage to your policy to protect against claims alleging you gave incorrect information or failed to deliver a service as promised.
  • Commercial Crime Insurance: Commercial crime insurance protects against theft by employees, including any losses resulting from forgery or fraud. It can be purchased as a standalone policy, or it can be added to your existing commercial general liability policy. Commercial crime coverages include money and securities (for losses due to burglary, robbery, or theft) and employee dishonesty (for losses or liabilities resulting from fraudulent acts such as embezzlement).
  • Non-Owned Auto Insurance: Non-owned auto liability coverage protects your business if an employee uses their personal vehicle for work, such as picking up parts to deliver to your shop. It provides coverage for damage to another vehicle or property, and any third-party medical costs resulting from a car accident.
  • Garage Keepers Liability Insurance: Garage keepers coverage is designed to protect your customers’ vehicles stored on your premises and while you or your employees are doing maintenance work or servicing them. It covers the cost of damages or losses due to fire, theft, vandalism, or severe weather if your repair shop is held liable for damages to a customer’s vehicle.
  • Tenant Legal Liability Insurance: Tenant legal liability coverage insures any loss or damage to the property that you rent or occupy (but do not own) for your business.
  • Leased, Rented, Borrowed Equipment Insurance: This type of coverage accounts for loss or damage to any materials and equipment you use in your auto repair shop that you lease, rent, or borrow.

What the annual premium is for auto repair shop insurance depends on a variety of factors, including:

  • The services your auto repair shop provides
  • Your years of experience as an auto repair shop owner
  • Where your shop is located and the size of the shop
  • Your annual and projected revenue
  • How many employees you have
  • The tools and equipment you have onsite
  • The contaminants your auto repair shop produces

You have the option to choose the level of coverage. Many auto repair shops carry at least $1 million of liability coverage. Speak to your broker to determine what the right level of coverage is for your business.

All automotive businesses need liability insurance to safeguard their operations from unforeseen circumstances and third-party bodily injury and property damage lawsuits, such as:

  • Auto glass installers
  • Oil change shops
  • Muffler repair shops
  • Transmission repair shops
  • Tire and battery repair shops
  • Service or gas stations
  • Parking garages
  • Auto detailing or vehicle painting facilities
  • Auto dealerships

Getting insured is quick and easy!

Complete our 5-minute online application for a free auto repair garage insurance quote.

Common claims scenarios

car fire damage

Problem: A fire erupts in your repair shop overnight, inflicting significant damage to your facility and several customers’ vehicles parked inside the garage. Some of the customers’ vehicles are determined to be total losses.

Outcome: Your garage liability coverage may pay for the cost to repair or replace the customers’ fire-damaged vehicles.


Problem: One of your auto repair technicians or mechanics mistakenly leaves a tool under the hood of a customer’s vehicle that does considerable damage to the engine after the customer drives away from your shop. The customer sues your auto repair shop for third-party property damage.

Outcome: Your commercial general liability insurance may cover the costs to repair the damages to your customer’s vehicle as well as any legal expenses that crop up if the customer sues you.

Car damaged by storm

Problem: While a customer’s vehicle is parked overnight on your repair shop’s property, a severe windstorm causes a branch from a tree nearby to break off. The branch lands on the customer’s vehicle and damages it.

Outcome: The “care, custody, control” coverage within your garage keepers liability insurance may pay for damages to your customer’s vehicle while it is parked on your premises.

Frequently asked questions

How much insurance do I need for my auto repair shop?

How much coverage your auto repair shop needs depends on several factors, including where your shop is located, the types of services you offer, how many employees you have, and what your annual and projected revenues are. It also depends on how many customers’ vehicles you have on your premises and the average value of each vehicle. Speak to a licensed broker to determine what level of coverage your auto repair shop needs.

Do I need additional coverage if my auto repair shop also sells used cars?

Provided your auto repair shop has a used car dealer licence as per your province’s regulations, you may require additional ‘used car dealer’ coverage to your commercial general liability policy to adequately protect the new or used vehicles in your possession. Whereas garage keepers liability insurance protects customer vehicles in your care, used car dealer coverage is designed to protect you against damages or loss such as theft and vandalism to vehicles you are selling. 

Does my insurance policy cover my mechanics in training?

A comprehensive package featuring commercial general liability and E&O (errors and omissions) insurance may cover the costs associated with any errors your auto mechanics or technicians make to a customer’s vehicle that lead to a car accident. Your auto mechanics and technicians, whether they are being trained or are experienced employees, are covered by a commercial general liability policy.

Why choose Zensurance?

Online Business Insurance Quote Form

Intuitive Online Experience

Do everything online, at your

24 HR Customer Support For Insurance Questions

Always Here For You

We’re just a click away

Business Insurance Coverage Full Transparency

Full Transparency

Get only the coverage you need in clear language

Our Most Recent Reviews

See what our small business customers have to say about us.

Google reviews rating 4.8 of 5 stars from 1500 plus Google Reviews

4.8 4.8 stars review
3000+ Google Reviews

Ready to start? Let’s get a quote!

Get started with a free quote from Zensurance. Our easy-to-use online application takes a few minutes to complete.

Our friendly, licensed brokers are insurance experts who can guide you through the process, assess your needs, review your coverages, and get your auto repair shop the comprehensive protection it requires.