Vehicle related businesses face some unique risks. That’s why there’s coverage — garage liability insurance — that provides specialized protection for them.
In this article, we’ll explain how you can secure coverage along with everything you need to know about garage liability insurance.
- What is garage liability insurance?
- How garage liability insurance works
- Garage liability vs. garage keepers coverage: What is the difference?
- Why is garage liability insurance important?
- Who needs garage liability insurance?
- How much does garage liability insurance cost?
- What other coverages do garage owners need?
- Garage liability insurance in Florida
- Garage liability insurance in Georgia
- Top 3 garage liability insurance companies
What is garage liability insurance?
Garage liability insurance is a type of insurance for businesses in the automotive industry, including vehicle dealerships, parking lot, garage operators, tow-truck operators, service stations, vehicle customizers, and car repair shops. The kinds of vehicle dealerships that can take advantage of this coverage include franchised and non-franchised automobile, truck, truck-tractor, motorcycle, recreational vehicle, and trailer dealers.
A garage liability policy comes with two separate insuring agreements. One of them deals with the ownership, maintenance or use of vehicles. The other covers all other garage operations.
How garage liability insurance works
Garage liability insurance is a type of commercial umbrella policy that provides coverage for the day-to-day operations of businesses in the automotive industry. This insurance adds an additional level of protection to the business’s general liability policy. The insurance covers costs related to bodily injuries and property damage from direct garage operations. Because the costs related to these risks can be so high, they’re usually not covered by most commercial or business liability insurance.
Be aware: You should check with an agent experienced in working with vehicle related businesses to find out whether you need garage liability insurance before you purchase it. There is a chance that your basic business liability coverage may be all the protection you need and that garage liability coverage is unnecessary or that it merely replace, not add, to basic business liability coverage.
Garage liability insurance will typically cover:
- Injuries to customers while on business property during normal operating hours up to the chosen limits of the policy
- Employee theft or vandalism of a customer’s car
- Damages related to parts or products sold by the company
- Losses associated with faulty parts installed on a client’s vehicle
- Vehicles used to conduct business, such as courtesy cars, vans and parts delivery trucks, may be insured at an additional cost.
Garage liability insurance does not cover:
- Tools, building, personal or business property
- Vehicles stolen by anyone other than an employee
- Damage from fire or weather events
- Accident or damage to customer cars being serviced.
Your commercial general liability policy will cover some of these things, especially those related to business property.
Tip: The overall policy and individual items in it will have a listed maximum liability coverage amount and may come with limits by claim type or year.
Garage liability vs. garage keeper coverage: What is the difference?
Garage liability insurance isn’t garage keepers insurance. Garage keeper insurance is a policy that covers damage to a client’s vehicle while it’s in the care of a business. The keeper coverage can provide protection against vandalism and theft of a customer’s car.
Important note: Businesses with more than one location will need a policy for each one.
Why is garage liability insurance important?
Vehicles are costly, and a single incident related to one or more of them could put an operation out of business. Businesses with adequate garage liability coverage can eliminate that risk.
Who needs garage liability insurance?
Businesses that have a physical location such as a garage, parking lot or storage area used to store or repair vehicles usually benefit from having garage insurance. This includes:
- Vehicle repair shops – Best auto repair shop insurance companies
- Body shops
- Tow or impound lots
- Muffler shops
- Transmission shops
- New and used car dealerships
- Tire shops
- And many more.
If you are running any types of the business above, you might want to consider the best companies on this list. If they are good for auto repair shops, they are also as good for other automotive businesses.
How much does garage liability insurance cost?
The cost of garage liability insurance varies significantly depending on:
- The type of work your business does
- Coverage needs and limits
- Physical location
- Claims history
- And more.
It can cost a small tire shop just a few hundred dollars a month, but a large car dealership tens of thousands a month to secure sufficient coverage.
In most cases, it’s important to get multiple quotes for business insurance online or through an insurance agent and compare them to make sure you’re getting the coverage you need at a fair price. However, with this insurance, it’s likely that you will have to trust your agent to find the best, most cost effective coverage for you because options are so limited.
What other coverages do garage owners need?
Some coverages garage owners typically need include:
- Garage keeper coverage protects you for physical damage to a customer’s vehicle while it’s in the care of your business. Learn more at the best garage keepers insurance companies
- Commercial auto covers vehicles used for business purposes, including tow trucks and pickup trucks. Lear more at the best commercial auto insurance companies
- Workers’ compensation provides benefits to employees who are injured or become ill because of work related reasons. Learn more at the best workers comp insurance companies
There are many more coverages your business could need. An experienced business insurance agent can advise you on the coverage you need.
Garage liability insurance in Florida
The state of Florida requires that car dealerships carry garage liability insurance. Motor vehicle dealers must obtain:
- A garage liability insurance certificate that includes at least $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 of personal injury protection
- A general liability insurance policy coupled with a business automobile policy that includes a minimum $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 of personal injury coverage.
An agent with experience in the vehicle sector can advise you on what — and how much — coverage you should purchase in the state of Florida.
Garage liability insurance in Georgia
The state of Georgia requires that car dealerships carry a minimum of $125,000 of garage liability coverage, along with securing a $35,000 surety bond.
These are minimum requirements for the state of Georgia. A representative at one of the agencies in Georgia that offer garage liability insurance can advise you on the level of coverage you need.
Top 3 garage liability insurance companies
Here are the top three insurers offering garage liability insurance and what makes each unique.
- Progressive: The best overall provider of garage liability insurance
- biBerk: Best for low-cost garage liability coverage
- The Hartford: Best for businesses looking for a solid and ethical insurer
Progressive: The best overall provider of garage liability insurance
Progressive may seem like a less-than-serious company because of its ongoing series of commercials featuring Flo. You might feel concerned about entrusting your business to the insurer.
The truth: It’s a reputable company that’s been offering vehicle-related insurance for more than 80 years and is a top insurer in the United States, which means it’s doing something right. The company is known for its flexibility, great rates and top-tier service.
Progressive is famous for its discounts, which could help you save on your garage liability insurance. Some discounts you could earn include ones for having multiple business policies with Progressive, paying for your insurance annually rather than incrementally, running a safe workplace and installing alarms and security systems.
biBerk: Best for low-cost garage liability coverage
biBerk is known for being a low-cost business insurance provider. Low-cost insurance doesn’t equate to cheap insurance. Despite saving money on your garage liability and other business insurance, you can rest assured knowing you’re still getting quality protection for your business. biBERK is able to lower insurance costs by almost 20 percent because it insures small businesses directly, without the added costs of having to work through a middleman or insurance broker.
biBerk is a part of Berkshire Hathaway, a company headed by well-known investor Warren Buffett. It’s a firm that has millions of satisfied customers that’s been insuring people and businesses for more than 75 years.
The Hartford: Best for businesses looking for a solid and ethical insurer
The Hartford is one of the oldest companies of any kind in the United States. It’s been offering insurance solutions for more than 200 years and has helped one million plus businesses with their insurance needs, including garage liability coverage. The company takes pride in the fact that the Ethisphere Institute named The Hartford a World’s Most Ethical Company twelve times. The Hartford’s longevity and focus on ethical business practices makes it a company that you can feel good about doing business with.
The Hartford’s dedicated and highly experienced small business team is available to help company owners explore their garage liability and other business insurance options. If you decide to purchase insurance from The Hartford, you can rest assured knowing you’re entrusting your business to a strong, stable, knowledgeable and ethical provider.