What is Garage keepers Liability?

| Auto insurance, Business Insurance, Garage Insurance, Insurance education.

garagekeepers liability

Anyone in the business of repairing, servicing, towing, storing, washing or otherwise working on automobiles has likely heard of garage keepers liability coverage. Garage keepers liability is often confused with “garage liability”. In reality, garage liability and garage keepers liability are two very different elements of the insurance coverage needed by an auto repair or service business. So, what is garage keepers liability, and, how is it different from garage liability?

An auto repair business has a very unique set of exposures. First, in order to diagnose and repair customer’s vehicles, a mechanic must perform a test drive.  Second, the garage business is entrusted with safely storing and protecting customer’s vehicle for the duration of the repair. Those exposures require very specialized insurance coverage, often provided by a Garage Coverage Form (CA0005).

Let’s start by answering the question in the blog article – what is garage keepers liability? In simple terms, garage keepers liability is physical damage coverage for vehicles left in the insured’s care. Just like a personal auto policy, it is comprised of comprehensive and collision coverage. Section III of the Garage Coverage Form reads as follows:

We will pay all sums the “insured” legally must pay as damages for “loss” to a “customer’s auto” or “customer’s auto” equipment left in the “insured’s” care while the “insured” is attending, servicing, repairing, parking or storing it in your “garage operations” under:
Comprehensive Coverage
From any cause except:
(1) The “customer’s auto’s” collision with another object; or
(2) The “customer’s auto’s” overturn.
Collision Coverage
Caused by:
(1) The “customer’s auto’s” collision with another object; or
(2) The “customer’s auto’s” overturn.

Like any insurance policy, there are exclusions. So, what is not covered by garage keepers liablity? There are several exclusions that are worth noting:

  1. Theft of the vehicle (or parts of the vehicle) caused by the insured or employees.
  2. Defective parts or materials.
  3. Faulty work performed by the insured.
  4. Loss to stereo or radio equipment, unless permanently installed in the vehicle.

There are additional and optional coverages available to address some of these exclusions.  Some providers of garage insurance offer mechanics E&O, broad form products and defective workmanship, or variations thereof.

Garage liability, in contrast, provides coverage for the use of customer vehicles, such as a test drive on public roads. Garage liability also provides coverage for non-auto operations such as a slip and fall injury in the shop or customer waiting area.

Garage Keepers Liability Quote

At Safeguard Insurance we, have been providing Nevada garage insurance since 1998. If you would like a no-obligation quote for your auto repair or sales business, give us a call or request a quote online. Let us help you find the right coverage at the right price.

Image: rido/123rf