How much does auto repair business insurance cost?

Auto repair businesses pay an average of $54 per month, or $652 annually, for general liability insurance. This policy is sometimes called public liability insurance.

General liability insurance covers common third-party risks, such as a client who slips on a wet floor at your repair shop and suffers a bodily injury, or accidental damage to a client's property.

In both instances, general liability insurance coverage would pay for the medical expenses and/or legal fees if the client sues over property damage or bodily injury.

It also helps pay for attorney's fees and other legal expenses if someone sues your business over copyright infringement or other advertising injuries, including defamation.

Below is the average general liability policy for car repair and mechanic businesses that buy from Insureon:

Insurance premium: $54 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

The per-occurrence limit is the maximum your insurer will pay for a single covered incident, while the aggregate limit is the most the insurer will pay for all claims during the policy period, typically one year.

General liability insurance costs depend on factors such as the coverage limits and deductible you choose, the types of auto repair and mechanic services you offer, your business income, claims history, and any endorsements you select, like an additional insured or garage keepers liability insurance.

Learn more about how your insurance premium is calculated and how to save money on your general liability coverage.

Garage liability insurance is a type of general liability policy specifically for garage-based and auto services companies.

While a standard general liability policy provides financial protection against common third-party risks, this coverage doesn't apply to hazardous workplaces like a garage. Garage liability insurance extends this coverage to risks associated with garage operations, like a customer slipping on motor oil.

You can often add garage keepers insurance as an endorsement to your garage liability insurance policy. This policy protects your customers' vehicles while they are in your care, custody, and control.

Auto repair shops and mechanics pay an average of $149 per month, or $1,787 per year, for a business owner’s policy.

A business owner's policy, or BOP, bundles general liability coverage with commercial property insurance to cover both third-party risks and your business property. It typically costs less than purchasing each policy separately.

A BOP protects against customer injuries, property damage to a customer's property, and vandalism. It also covers damage to your auto repair equipment, as well as your building. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents for those who rent or own a shop.

This is the average BOP for auto repair professionals who buy from Insureon:

Insurance premium: $149 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000

Small, low-risk auto services companies are often eligible for a business owner's policy.

Auto repair shops may see higher costs if they choose to add endorsements to their policy. Insurance endorsements, such as business interruption insurance or equipment breakdown coverage, are often recommended to help pay for lost income if a fire or power outage forces your business operations to cease for an extended period of time.

The cost of a business owner's policy is based on many factors, including the value of your business property, where you are located, the number of employees you have, and your specialty.

Auto repair companies that are medium-sized and/or higher risk should consider a commercial package policy (CPP).

The average cost of a CPP for auto repair shops and mechanics is $101 per month, or $1,208 per year.

A commercial package policy also combines your general liability coverage with property insurance, but offers more flexible protection options than a BOP.

For auto repair and mechanic businesses, the average cost of workers’ compensation insurance is $150 per month, or $1,796 annually.

This policy covers medical expenses and lost wages related to employee injuries. It usually includes employer's liability insurance to protect against lawsuits from workers who get injured or ill on a jobsite.

Businesses with employees typically must purchase workers' comp to comply with state requirements and avoid penalties. For example, all auto repair businesses in California, Pennsylvania, and New York must carry workers' comp if they have one or more employees. Florida businesses need coverage when they have four or more employees, and coverage is optional in Texas.

Since health insurance plans can deny insurance claims for injuries related to your job, workers' comp coverage is also recommended for independent contractors as a safety net against financial losses.

The cost of workers' comp depends on several factors, primarily the number of employees you have and their occupational risks. You can save money on workers' comp coverage by classifying your employees correctly and implementing a risk management plan to avoid work-related injuries and subsequent claims.

Auto repair stores and mechanics pay an average of $103 per month, or $1,227 per year, for commercial auto insurance.

This type of insurance pays for legal costs and medical bills if your business-owned vehicle injures someone or damages their property in an accident. It can also cover vehicle theft, vandalism, and weather damage.

Most states require commercial auto insurance for vehicles owned by an auto repair or mechanic business. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead.

The cost of commercial auto insurance depends on several factors, including your policy limits, the coverage options you choose (e.g., additional insured endorsements or comprehensive coverage), the number and value of your vehicles, and the driving records of anyone permitted to drive.