Garage Liability Insurance

Automotive garage owners and repair shops keep our vehicles humming and roadworthy. As the vehicles we drive become more advanced and increasingly feature technologies that keep us safe and extend the life of the cars, trucks, and other vehicles, garage owners shoulder a heavy responsibility to protect the vehicles under their care and control.

More than 100,000 Canadian entrepreneurs and small business owners trust Zensurance to help them protect their businesses with customized insurance policies designed to cover their needs.

Garage liability insurance is a bundle of insurance coverages designed specifically for all kinds of automotive businesses. It is an umbrella policy for businesses in the automotive industry that covers their daily operations and protects business owners and their employees from the risks they face. Without it, one third-party lawsuit against you could bankrupt your business and ruin your professional reputation.

Garage liability insurance provides several types of coverages that are designed based on the type of automotive business you run. The types of policies in a garage liability policy usually include:

• Garage Liability Insurance: You know covering the customer vehicles in your care is essential. Garage liability coverage does precisely that. It protects your business while they are under care, custody, and control of your clients’ vehicles. Whether those vehicles are being worked on in the shop, being driven by an employee, or parked in the lot. It includes coverage for open lot theft in case of thieves break into the yard and steal auto parts from a client’s vehicle, as well as damages to a customer’s vehicle resulting from an accident while one of your employees is test driving a vehicle following a repair.

• Commercial General Liability (CGL) Insurance: CGL is a liability insurance policy that protects your business against common claims like third-party property damage (damage to a customer’s vehicle) or bodily injuries (if a customer visiting your auto garage slips, falls, and is injured). CGL may cover a customer’s medical expenses and your legal fees regardless of the outcome of a lawsuit you face.

• Commercial Property Insurance: Commercial property insurance protects your shop, as well as its contents 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, such as overhead costs, employee wages, and lost income from temporarily closing your business while the building is repaired. However, business interruption coverage does not cover income lost due to a pandemic, infectious disease, or government-ordered closure.

• Garage Tool Insurance: This policy provides coverage to replace, or repair lost or damaged equipment and tools, accessories, or others’ property in your care.

Additional coverages recommended for automotive businesses:

• Cyber Liability Insurance: Nowadays, all businesses require cyber liability insurance. After all, it is your responsibility to protect your customers’ personal and financial data from the risk of a data breach or cyber-attack. Essentially, cyber liability insurance covers the costs associated with electronic incidents, such as cyber-attacks on your computing systems.

• Pollution Liability Insurance: Certain kinds of automotive businesses can have a detrimental impact on the environment. 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 you use to do your work.

• 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 CGL policy.

• Leased, Rented, Borrowed Equipment Insurance: If you lease, rent, or borrow equipment to do your work, this type of coverage provides financial support for loss or damage to that equipment you use in your garage.

Contrary to popular belief, it’s not just auto repair shops that require garage liability coverage. Garage liability policies are tailored to cover a broad range of automotive businesses including:

The annual premium for garage liability insurance depends on a variety of factors, including: 

• The services you provide
• Your years of experience in the industry
• Where your garage is located and its square footage
• Your annual and projected revenue
• How many employees you have
• The tools and equipment you have on-site
• The contaminants or toxins your garage produces

It’s up to you to choose the level of coverages you want. Most garage owners carry at least $1 million of liability coverage. Speak to a Zensurance licensed broker to determine what the right level of coverage is for your business.