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Garage Liability Insurance: Definition & Overview

Updated: November 24, 2022

Protecting yourself, your family, and your business is incredibly important. There are many different insurance policies you can take out to ensure you’re covered should something unfortunate happen. For example, vehicle insurance can help if you get in a car accident. Property insurance can help if your business sustains damage from a flood or fire. 

But if you operate an automotive business, is there a way to get a wider range of coverage? The answer is yes, and this is where garage liability insurance can be helpful. Keep reading to learn everything you need to know, including how it works, its importance, what it covers, and more valuable information. 

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    KEY TAKEAWAYS

    • Garage liability insurance covers businesses that work with vehicles.
    • The cost of garage liability insurance will vary depending on the size and scope of your business.
    • Garage liability insurance policies typically do not cover employees. You may need to purchase a separate policy to insure your employees.

    What Is Garage Liability Insurance?

    When you think of liability insurance, you probably think of the kinds of coverage that would protect you from liability. For example, a serious accident or injury.

    You may not think about liability insurance as something that could protect your property and assets in a covered scenario.

    Garage liability insurance can have several benefits. It’s coverage for automotive business owners with a risk of third-party liability.

    Liability insurance for garages covers expenses related to liabilities. Such as arising from an accident on your premises or another covered location.

    Garage liability insurance is vital if you own a garage where visitors could get injured while visiting it. Or if there are potential risks that visitors might get hurt while on your premises.

    Let’s take a closer look at why you should consider getting garage insurance against third-party liability.

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    How Garage Liability Insurance Works?

    Garage liability insurance is a type of commercial insurance. It covers third-party liability claims against your business. It’s also sometimes called commercial general liability insurance or commercial property insurance.

    The coverage is a commercial umbrella policy that attaches to your business’s general liability policy. With this type of policy, you have coverage against third-party claims. These could be due to your employees’ negligence or third-party property damage on your premises.

    The garage liability insurance policy kicks in if the original liability coverage is not enough to cover the costs.

    As a business owner, this insurance is essential during business operations. If there’s accidental damage resulting in bodily injury or property damage, you need to know you have coverage. With the right insurance in place, you can ensure smooth operation.

    Importance of Garage Liability Insurance

    Depending on the policy, this insurance may also cover injuries to customers who are on your premises.

    Medical care is essential for any injury victim. But garage liability insurance can give you financial protection if an accident results in a lawsuit. Garage liability insurance can be beneficial in several ways. Some of the key benefits include:

    • Garage owners can avoid potential lawsuits due to accidents or injuries that occur on their premises.
    • Garage owners can have peace of mind knowing that any expenses associated with a lawsuit will have coverage.
    • Garage owners can have a continuous coverage that applies to all locations where the business operates.
    • Garage owners can obtain a commercial policy that is more affordable than a personal policy.

    What Does Garage Liability Insurance Cover?

    Garage liability insurance covers all the expenses related to third-party liability claims. Such claims must occur on your premises or any other covered location.

    Coverage includes defense of the claims, and it covers any settlement or judgment if the claim is finally awarded to the injured party.

    The insurance policy also provides coverage for any damage to property that occurs due to your negligence. It covers expenses associated with cleaning or repairing the property. It also covers the legal expenses of any third party injuries.

    Direct garage damage has coverage. But what about equipment damage? Keep reading to learn more.

    What Doesn’t Garage Liability Insurance Cover?

    Let’s look at some common garage insurance exclusions. Garage liability insurance does not cover property or tools. These include the personal, business, or building property of the policyholder.

    It also doesn’t cover vandalism, theft of vehicles, or damage caused by events from extreme weather, like hail damage.

    The policy won’t cover damage to customers’ cars getting serviced. Any damage to cars would be under additional coverage.

    Also, employees are not covered. You should look into getting another type of coverage for your employees.

    Additional coverage for garage owners is often needed. This is because of the medical bills associated with an employee injury. Injuries to employees can easily occur in your day-to-day operations.

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    Types of Companies That Benefit from Garage Liability Insurance

    Garage Liability Insurance is highly beneficial for:

    • Garage
    • Auto shop
    • Parking lot
    • Auto businesses with significant third-party liability risk factor
    • Salvage yards

    This type of policy is an umbrella policy attached to a business’s general liability policy. The garage liability insurance policy kicks in if the original liability coverage is not enough to cover the expenses in the event of a lawsuit.

    Garage liability insurance is vital for companies where third-party bodily injury is possible. Parking garages, car services, auto repair shops, and other types of businesses with a significant amount of foot traffic. These are all businesses that should get this insurance.

    Garage Liability vs Garagekeepers Liability

    Garage liability insurance and garagekeepers insurance are two different types of insurance policies.

    Garage liability is a type of commercial insurance that covers third-party liability claims. It is a type of umbrella policy that attaches to a business’s general liability policy.

    This gives you another layer of protection to your auto repair shop insurance. Talk to your business auto insurance provider about commercial umbrella insurance.

    The garagekeepers insurance is a type of product liability insurance. It protects business owners from potential legal liability for the product they sell.

    If one of the products sold by the owners results in an injury or an accident, the insurance company would pay for the expenses related to the claim.

    Summary

    Garage liability insurance is commercial insurance covering third-party liability claims against your business. It is an umbrella policy that attaches to a business’s general liability policy.

    It is essential if your business has a significant amount of foot traffic and potential accidents or injuries. It covers expenses related to the defense of the claims. It also covers any settlement or judgment if the claim is finally awarded to the injured party.

    Garage liability insurance is beneficial for the automotive industry. This can include garages, repair shops, and car services that have a significant third-party insurance risk factor.

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    FAQs about Garage Liability Insurance

    Do I need insurance for a garage?

    Yes, if you own a service station, auto body shop, or other business that deals with vehicles. You should have garage liability insurance.

    What is the difference between general liability and garage liability?

    Garage liability insurance specifically covers businesses that work with vehicles. General liability insurance is a broader type of insurance. It can cover a variety of businesses but may not provide as much coverage for businesses that work with vehicles.

    What does the garage Coverage Form cover?

    The garage Coverage Form is a type of insurance policy. It provides coverage for service stations, auto body shops, and other businesses that work with vehicles. This policy can cover claims of property damage or injury that occur while customers are on your premises.

    Does garage liability insurance cover employees?

    Garage liability insurance policies typically do not cover employees. You may need to purchase a separate policy to insure your employees.

    How much does garage liability insurance cost?

    The cost of garage insurance will vary depending on the size and scope of your business. You should speak to an insurance agent to get a tailored quote for your cost of insurance.

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