There is always a risk factor if you’re running a car service facility that stores or maintains customers’ cars. Chances are that the customer gets injured in the garage or that their car is stolen or damaged. So, there should be a way to protect your business. For that, the best way is to have a garage liability insurance policy.
What does a garage liability insurance policy mean? Which businesses must have this insurance coverage? Our article will be the perfect guide to know in detail about this.
What Is Garage Liability Insurance?
Garage liability insurance is a policy that covers property damage or bodily injury caused by an incident outside of garage operations. This insurance is added to the business liability coverage of car dealerships and parking lot or parking garage operators. Tow-truck operators, service stations, customization, and repair shops can also be added. The policy covers property damage and bodily injury caused by operations.
Businesses That Require Garage Liability Insurance
- Parking lots
- Auto dealerships
- Auto body shops
- Towing companies
- Auto repair shops
- Oil change shops
- Service stations
- Emissions testing centers
- Auto glass repair shops
- Auto detailers
What Does Garage Liability Insurance Cover?
This insurance is a type of umbrella policy that covers the day-to-day operations of automotive-related businesses. It will supplement the company’s general liability policy. Coverage includes bodily injury and property damage resulting from direct garage operations, which are not covered by commercial or business liability insurance.
How Does Garage Liability Insurance Work?
Before purchasing a policy, the business owner should ensure that the garage liability coverage supplements, rather than replaces, their primary business liability coverage. Up to the policy’s chosen limits, coverage will include injuries to customers while on business grounds. Furthermore, most garage insurance policies include an employee dishonesty provision for theft or vandalism committed by an employee of the customer’s car. Any cars used in business, such as courtesy vans and parts delivery trucks, may be added for an additional premium.
The cost of a garage liability insurance policy can vary greatly depending on several factors, including your company’s annual revenue, the limits you choose, the coverage options you choose, and the deductible you choose.
Essential Things to Know Before You Sign Up
The insurance does not cover the policyholder’s tools, building, personal, or business property. It also does not cover vandalism, stolen vehicles, or damage caused by events such as hail. The policy does not cover accidents or damage to the customer’s cars while serviced onsite. Furthermore, all primary and additional policy items will have a listed maximum liability coverage amount and may have aggregate limits by claim or by year.
Who Should Get It?
After learning more about it, you may wonder if you need garage insurance. If you own a business that deals with cars, having such a policy can be highly beneficial. This includes businesses such as emissions testing stations, valet services, and those that repair or customize cars. In a nutshell, garage liability insurance protects any business that sells, transports, or repairs cars.
In some cases, landlords who want to protect their assets from a particular business activity may require garage liability insurance.
Having the correct liability policies in place can also give you peace of mind. Keep in mind that garage insurance not only covers standard vehicles such as cars and trucks.
Individual or fleets of motorcycles, trailers, and tractor-trailers can also be covered. While garage liability insurance is not required in most states, having it could save your business from financial ruin.
How Much Does Garage Liability Insurance Cost?
The cost of garage liability insurance typically ranges between $1,150 and $2,500. However, this rate can differ considerably based on the garage’s location, revenue, employee count, and the risk related to its functioning. Other factors that require consideration are the type of vehicles the garage ideally works with, coverage limits, and the deductibles selected.
Difference between Garage Liability and Garage-Keeper Coverage
While they may sound similar, they can be very different, making it critical to understand what is covered and what is at risk. To put it simply, the difference in coverage is the distinction between liability insurance and physical damage insurance. It’s essential to understand the distinction between garage liability insurance and garage keepers’ coverage. The garage keepers’ coverage provides coverage for the customer’s vehicles while the shop owner is servicing them. This means that if any damage to the vehicle occurs onsite, the general liability will compensate for the loss.
Do you have multiple garages in the same or different cities? Then, depending on the number of shops you have, you will need policies. The policy also includes coverage for theft and destruction caused by a dishonest employee.
All Your Questions Answered
Florida garage liability insurance will cost over $3,000 a year. The state’s location makes it extremely susceptible to flooding and hurricanes, surging the insurance premiums. Florida’s flat terrain and wide coastline elevate the occurrence and severity of flooding and hurricanes. So, the claims are frequent, thereby surging the insurance premiums.
Georgia garage liability insurance costs you around $3,000.
No, they aren’t the same. Dealer fleet insurance exclusively covers any physical damage to the dealership’s vehicle inventory. Garage liability insurance offers extensive coverage for the dealership’s processes, such as bodily injury and property damage due to accidents on the grounds or during business operations.
No, ideally, it doesn’t cover faulty workmanship. The insurance ideally covers claims due to property or bodily damage to third parties because of the business’s operations.
Sara Sam may not look like your typical car and finance expert, but don’t let that fool you. With over four years of experience in the industry, she knows all the ins and outs of cars, car insurance, and refinancing. You can trust Sara to help you navigate the often-confusing world of automobiles and financing.
