What is 'Garage Liability Insurance'

Garage liability insurance is specialty insurance targeted to the automotive industry.  Automobile dealerships, parking lots or parking garages operators, tow-truck operators, service stations, and customization and repair shops will add garage liability insurance to their business liability coverage. The policy protects property damage and bodily injury resulting from operations.

This insurance is not the same thing as garage-keepers coverage.

BREAKING DOWN 'Garage Liability Insurance'

​​​​​​​Garage liability insurance is a type of umbrella policy which provides coverage for the day-to-day operations of the businesses in the automotive industry. This insurance will add a layer of protection to the business' general liability policy. Coverage includes bodily injury and property damage from direct garage operations, not covered under most commercial or business liability insurance. 

Before buying a policy, the business owner should verify that the garage liability coverage will add to, and not merely replace, their basic business liability coverage.

Coverage will include injuries to customers while on the business grounds up to the chosen limits of the policy. Also, most garage insurance will consist of an employee dishonesty provision for theft or vandalism done by an employee of a customer's car. For an added premium, any autos used in the conducting of business, such as courtesy vans and parts delivery trucks, may be added. Additional protections can include damages from parts or products sold by the company and coverage for loss from faulty parts installed on a client's vehicle. 

Garage liability insurance will not cover the tools, building, personal or business property of the policyholder. It does not provide coverage for vandalism, stolen vehicles, or damage from events such as hail. The policy does not cover accidents or damage to the customer's cars on site for service. Also, all policy basic and additional items will have a listed maximum liability coverage amount and may have aggregate limits by claim or by year. 

Commercial general liability (CGL) insurance policies have varying levels of coverage. This insurance may include coverage for the premises, which protects the business from claims on location during regular business operations. It may also include coverage for bodily injury and property damage resulting from finished products.

Garage Liability is Not Garage-Keeper Coverage

Garage-keepers insurance is a separate policy which covers the property damage to a client's car while it is in the care of the policyholder. This can include damage during road test drives and while storing the vehicle during non-working hours. The keeper's insurance will cover vandalism and theft of a customer's car. Business with multiple locations require policies for each site. 

Other Business Insurance Products

Businesses may purchase coverage for other business risks as well.

  • Employment practices liability insurance covers claims associated with sexual harassment and discrimination. 

  • Professional liability coverage insures against negligence claims that result from mistakes or failure to perform. 
  • Property insurance covers equipment, signage, inventory, and furniture in the event of a fire, storm or theft. However, additional coverage is needed to cover events such as floods or earthquakes. 
  • Business interruption insurance compensates for lost income during events that prevent normal business operations, such as an extended power outage.
  • Workers' compensation insurance is mandatory for employers to protect employees and to cover an injured employee’s medical care. It also provides lost wages and death benefits to a deceased worker’s immediate family.
  • A company may name other companies or individual as additional insured under its commercial liability insurance policy. For example, if an automobile repair garage enters into a contract with another company to provide car washing services, that company may require the garage owners to add it as additional insured on their garage liability coverage. 
RELATED TERMS
  1. Business Insurance

    Business insurance coverage protects businesses from losses due ...
  2. Automobile Liability Insurance

    Automobile liability insurance is financial protection for a ...
  3. Worldwide Coverage

    Worldwide Coverage is an insurance policy provided by some insurers ...
  4. Insurance Coverage Area

    Insurance coverage area refers to the geographic region in which ...
  5. Comprehensive Personal Liability

    Comprehensive personal liability coverage pays for covered losses ...
  6. Backdated Liability Insurance

    Backdated liability insurance provides coverage for a claim that ...
Related Articles
  1. Insurance

    What Is and Isn't Covered by Homeowner's Insurance

    Understanding what your insurance covers can be confusing. Learn what almost all insurance policies have in common so you're prepared if disaster strikes.
  2. Insurance

    Millennials Guide: Picking the Right Car Insurance

    Millennials fall into the category of high car-insurance rates. Check out some of the ways to save money, like owning an older car or leasing a vehicle.
  3. Insurance

    Top Tips for Cheaper, Better Car Insurance

    Accident, theft, vandalism - make sure your coverage will protect you when you need it most.
  4. Insurance

    How to Find the Right Car Insurance

    Finding the right car insurance can be difficult. However with these strategies, you can get the most for your money, protect your assets and your health.
  5. Insurance

    What Does Renter's Insurance Cover?

    Renter's insurance is supposed to cover a tenant's personal property as well as liability claims, but not all policies deliver.
  6. Insurance

    Do You Need Umbrella Insurance For Household Help?

    Homeowners insurance may not be enough – say, if your nanny sues for damages after an accident. That's where umbrella coverage comes in.
  7. Insurance

    12 Insurance Questions for High Net Worth Families

    High net worth families should ask themselves these 12 questions regarding comprehensive insurance.
  8. Insurance

    Insurance, Excess Insurance and Reinsurance: What's the Difference? (ALL)

    Understanding the differences might help you avoid being overinsured or underinsured.
  9. Managing Wealth

    Protect Your Company From Employee Lawsuits

    Understanding employment practices liability insurance is easy, once you know the basics.
  10. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
RELATED FAQS
  1. What Damages are Covered by my Home Insurance or Auto Insurance?

    Generally, damage to an automobile will be covered by comprehensive car insurance, which is in addition to collision coverage. Read Answer >>
  2. Can an Insurance Company Deny Coverage?

    Insurance isn't always as straightforward as other products, and insurers can deny coverage in many different instances. ... Read Answer >>
  3. How does the 80% rule for home insurance work, and how do capital improvements affect ...

    Learn what the 80% rule in homeowner's insurance is and what homeowners need to do so their insurance company covers the ... Read Answer >>
Trading Center