Garage liability insurance

Garage liability insurance is a type of general liability insurance for garage-based and auto service businesses.

A standard general liability policy provides financial protection against common business risks, including customer bodily injuries and customer property damage. However, it typically doesn’t cover these risks in a hazardous workplace like a garage.

Garage liability insurance, also called garage insurance, extends this protection to risks associated with garage operations, such as a customer slipping in leaked motor oil at a repair shop. It helps pay for medical bills, repair or replacement of damaged property (other than vehicles stored on-site for service), and related lawsuits.

Any business that maintains, repairs, sells, or stores vehicles in an area where the public is present should carry garage liability insurance. Such businesses include:

• Car dealerships
• Auto repair shops and auto body shops
• Oil change, muffler, and tire shops
• Tow truck services
• Impound lots and parking lots
• Garage owners and vehicle storage businesses

Garage liability insurance covers several types of risks associated with automotive business operations, including:

If a customer or visitor is injured at your garage or auto shop, their medical costs would be covered by garage insurance.

If an item belonging to a customer or visitor is damaged by an accident on your premises, this policy would cover the cost of repair or replacement. However, this does not include customers' vehicles on-site for service.

If a customer sues your business over an accident that caused an injury or property damage, this policy would help pay for your legal defense costs. It also covers settlements and court-ordered judgments.

Most garage policies include products-completed operations coverage. This coverage helps pay for expenses if a customer is injured or suffers other damages because of a defective part, faulty repair, or other liability claim related to your services or parts that you provided.

Garage insurance doesn’t cover your business property, such as the building itself, your tools, and your equipment. These are covered by commercial property insurance, which is included in a business owner's policy (BOP).

Other common risks that aren’t covered by garage liability insurance include:

• Damage or theft of customer vehicles, which is covered by garage keepers liability insurance
• Damage to your own business vehicles, which falls under commercial auto insurance
• Employee injuries, which are covered by workers' comp insurance (required in most states)

Garage keepers insurance is not the same as garage liability insurance, although both are often purchased by businesses that store, repair, or maintain vehicles.

Garage keepers liability insurance, also called storage location insurance, insures a customer’s vehicle while it’s in your care, custody, or control. It provides protection in the event of fire, vandalism, accidental damage, or theft. This includes damage inflicted while moving a customer’s vehicle or taking it for a test drive.

For example, if a mechanic scrapes a cinderblock while moving a customer's car for an oil change, a garage keepers policy would pay for the accidental damage to the car's bumper.

Learn more about the difference between garage liability and garage keepers insurance.

You can compare quotes for general liability insurance and other policies from top-rated providers by completing Insureon's easy online application. For garage insurance, talk with an agent to discuss your options.

If you’re not sure which type of insurance your small business needs, you can consult with a licensed agent about policies including business owner's policy, commercial auto insurance, and workers' compensation insurance. Once you've chosen a policy, you can begin coverage in less than 24 hours.