Garage Liability Insurance

Garage Liability Insurance

Automotive businesses of all kinds need a customized garage liability insurance policy to protect them from the unique risks they face.

Zensurance - Garage Shop Owner

Partnerships with over 50 leading Canadian insurance providers

Garage Owner

Garage insurance for automotive businesses

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.

There are 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 client’s 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:

  • 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.

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.

Contrary to popular belief, it’s not just auto repair shops that require garage liability coverage.  Zensurance can help find tailored insurance policies for a broad range of automotive businesses including:

  • Automotive repair shops
  • Auto detail garages
  • Auto service technicians or mechanics
  • Collision body shops
  • Car washes
  • Emission and inspection repair centres
  • Engine rebuilding shops
  • Glass and windshield repair facilities
  • Lube, oil, and filter change shops
  • Muffler repair shops
  • New and used car dealerships
  • Parking garages
  • Service stations
  • Transmission repair facilities

Getting insured is quick and easy!

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

Common claims scenarios

Damage of clients vehicle

Problem: While one of your employees is test driving a customer’s vehicle following a minor repair, they get into an accident that causes significant damage to the front bumper and grid. Your customer sues you for damages to the vehicle.

Outcome: Your garage liability insurance may cover the cost to repair the customer’s vehicle, your legal fees, and any court-ordered settlement.

auto mechanic and female customer in garage

Problem: While walking through your garage to review the work you did to a customer’s vehicle, the customer slips on an oil slick, falls, and fractures their right arm. They sue you for bodily injury and loss of income because they are unable to do their job while their arm heals.

Outcome: Your commercial general liability insurance may cover the cost of your injured customer’s medical expenses, loss of income, and your legal fees to defend yourself in court.

Thief Stealing Computer And Laptop

Problem: Overnight, your garage is broken into and a significant portion of your inventory as well as your computing systems are stolen.

Outcome: Your commercial property insurance may cover the cost to replace your inventory and computing systems, and the damage inflicted on your building by the burglars.

Frequently asked questions

What is excluded from a garage liability insurance policy?

A garage liability insurance policy does not provide coverage for the contents in a customer’s vehicle such as clothing, money, or other items.

Can a mechanic or auto repair technician be held liable because of a car accident involving a customer’s vehicle during a test drive?

Yes. A mechanic or auto repair technician can be held liable for damages to a customer’s vehicle resulting from a car accident they were driving to ensure it is in good condition after repairing it.

What is the difference between garage liability and garage keepers’ liability insurance?

Garage liability insurance protects you from third-party bodily injury or property damage claims. Garage keepers’ insurance provides financial support if a customer’s vehicle that is in your care and control is damaged while on your premises due to a natural disaster, severe weather, theft, and vandalism.

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!

When it comes to pleasing your customers by protecting and keeping their vehicles in tip-top shape, you put the pedal to the metal. You deserve a customized insurance policy that suits your needs and puts your mind at ease. 

Fill out an online application now for a free quote. Our friendly, licensed brokers will find you the policy that suits you at an affordable price.