Garage liability Vs. Garage Keepers Insurance?

If you own an auto repair shop or garage, chances are you’ve heard of garage liability and garage keepers coverage. These two types of insurance coverage are often confused. If you own an auto repair or service business, understanding how these coverages differ is important. Garage keepers liability insurance covers damages to customers’ vehicles while they’re in your care, custody, or control, whereas garage liability insurance provides broad liability coverage for your business as a whole.

Let’s dive into the details of these two coverages. We’ll compare garage liability and garage keepers and show how each is designed to protect your business.

What is garage liability insurance?

Garage liability insurance is specifically designed for businesses that work with automobiles like repair shops, garage operations, and towing companies. Essentially, it’s a unique form of general liability insurance for the auto service industry. This coverage provides protection for bodily injury and property damage that may arise from your business operations. For example, a customer slips on spilled coffee in your waiting lounge and suffers an injury. Learn more about general liability insurance.

When you operate an auto service business, your general liability needs to be modified. For other types of business operations, general liability would never cover auto-related losses. Auto-related losses are better covered under commercial auto insurance, or hired and non-owned auto. However, because moving and test-driving cars is incidental to auto services businesses, these businesses require a unique form of general liability protection. As a result, garage liability insurance is tailored to the unique risks that come with working in the automotive industry. This means that it can provide more targeted coverage and protection for your business. 

What is garage keepers liability?

Garage keepers liability insurance is a type of insurance coverage that provides protection for damages to customers’ vehicles while they’re in the care, custody, or control. This is a unique form of coverage for businesses that provides automotive services. Basically, if someone leaves their car with your garage or repair shop and it gets damaged while it’s there, garage keepers liability insurance can help cover the cost of repairs. 

Let’s summarize the differences

Garage liability insurance and garage keepers liability are two distinctly different types of insurance protection. Both coverages are unique to the auto services industry. However, they both serve a unique purpose. Garage liability insurance covers your business’s general liability, with modifications to accommodate the unique risk of the auto services industry. On the other hand, garage keepers covers damages to customers’ vehicles while they’re in your care, custody, or control.

So, if a customer’s car is scratched by one of your employees during repairs, garage keepers can help cover the cost of repairs. On the other hand, if a customer slips and falls in your shop, garage liability insurance can help cover the cost of any resulting lawsuits or damages. 

Why do you need both?

Having both garage liability and garage keepers is important for businesses in the auto services industry. Each provides a different type of protection that can help protect your business from a variety of risks. When you purchase both, you are getting protection for your general liability risk, the liability risk associated with an auto repair business, and covering the property (customer’s vehicles) that you take into your care and custody. 

Having both policies can provide proper coverage for your auto services business.  Together, they work to protect you from unexpected costs or lawsuits that could arise from accidents or damages. By having both types of insurance, you can be confident that your business is protected from a wide range of risks and liabilities.

How do I buy garage liability or keepers coverage?

Now that you understand the difference between liability coverage and garage keepers, it’s time to shop for insurance protection for your business. But you want to be sure that you’re getting the right protection for your auto services business. How do you know if you bought the right protection?

When shopping for business insurance, you want to make sure you work with an experienced insurance agent who has expertise in the auto services industry. They can help you fill in the gaps in your understanding, and make sure your coverage is set up correctly. The good news is, if your agent classifies your business right, and helps you select the correct garage keepers coverage you should be OK. You can also review your policy declarations to confirm your business is classified correctly, and the amount of coverage you elected.

The bottom line

Understanding the differences between garage liability and garage keepers coverage will help you make better decisions when shopping for business insurance. Because each industry and coverage has nuances, you should always shop for business insurance with an experienced insurance agent. Someone who can answer your questions, and has knowledge about your unique industry.

If you’re still uncertain about the differences, or how to buy these important protections, contact your insurance agent or carrier. If you don’t have an agent, contact us, or start a quote online.