What makes Garage Liability Insurance tick?
Or vroom, as the case may be. As a part of your Auto Mechanic Insurance, or what us insurance agents call Garage Insurance, Garage Liability is a vital piece of protection that helps businesses that have cars or trucks in their possession avoid liability for any number of accidents that can happen.
When most people think of liability insurance (if they do at all), they think about Commercial General Liability, which is a similar but not exactly the same coverage.
But instead of talking about what it isn’t, why don’t we just get into what it is? Because it does more than just what I mentioned above. Okay, okay, let’s just get into it.
The Essentials
Garage liability coverage protects you and your business from bad things that happen while you are in possession of other people’s cars or trucks. This is typically while you are fixing the vehicle, but even if you are just keeping it for a few days before you get a chance to look at it, this coverage applies.
The most common scenario is when you or a body shop employee are test driving a vehicle and cause a car wreck that is yours or the employees fault. Just like the liability coverage for your personal auto insurance policy, garage liability covers damages that you may cause to others in an accident.
But there is another very important thing that this coverage does! Garage liability covers the work performed by your business on a car or truck in your possession. What does that mean? Let’s look at another example.
Let’s say you replaced the brakes on a vehicle for a customer. But instead of completing the work, your employee accidentally damaged the break line. The following day your customer picks up the vehicle and gets into an accident on the way home because they can’t stop the car.
Garage liability insurance would cover the damages to the person’s car, any bodily injury, and even legal fees if the customer takes you to court.
This is a hugely important part of the coverage! In today’s lawyer-happy world, people are encouraged to sue one another for even the slightest issue.
If you or your employee are responsible for a problem with the work you’ve done, what we call negligence, garage liability will protect you from legal fees and awards that result from any court cases or out-of-court settlement.
So those two main pieces of coverage are awesome. But can garage liability do anything else? Actually, yes.
Additional or Optional Coverages
Some companies do more than just the basics. They include coverages that are either traditionally with another coverage type or just throw in more value to make themselves more competitive. Knowing the difference is difficult as each company can change what they do – which is why you need an agent!
But I will go over some of the coverages that do get included by some companies. Remember to ask your agent if the coverages below are a part of your policy.
Optional Cov A: If you’re a dealer as well as a mechanic, good news: Garage liability covers your owned vehicles too. But remember, this only covers the liability, not the actual physical bodies of the cars themselves.
So if you’re driving around on an owned vehicle and you hit someone, it’s just like a car you’re fixing that is in your possession. Garage liability covers it.
Optional Cov B: If you lend your customer a car while you are working on theirs, you may be pretty nervous about what happens to both the car and the driver.
Luckily with this option your garage liability extends to the garage customer, protecting you from any trouble that can happen with someone else driving a car that you own.
Let’s wrap it up.
The bottom line is that this coverage protects you from something bad that you or one of your team members did – or at least something that someone claims you did.
If you are on the hook for an accident, an incorrect repair job, or a legal matter, then garage liability steps in and protects you so that you don’t pay a massive bill out of pocket.
As I’ve talked about in other blogs, the cost of claims is going up – especially bodily injury claims and legal claims. With medical care so expensive, any accident where a person gets hurt can result in a claim that costs over $100,000.
And people tend to ask for MORE when they know the person on the other end of an accident represents a business.
If it’s a court case, then it might as well be the Wild West. Anything can happen, from your policy only paying court fees to protecting you up to whatever limit you have as your maximum.
If a court decides that the mechanic or employee needs to be made an example of, the fines and awards can be in the millions.
So make sure you’ve not only got garage liability, but the RIGHT garage liability. Let’s get you scheduled to speak with an agent who specializes in Garage Insurance and let’s make sure you are protected the way you deserve to be covered.
