What is Garage Liability Insurance?
Garage Liability Insurance protects your premises, products, and completed operations against any work you may do on a customer's vehicle which might result in bodily injury or property damage. It will also cover vehicles owned by your business (they must be listed in the policy). It is a sort of umbrella policy that adds protection to your general liability policy. Garage liability Insurance is essential for anyone with garage operations in the automotive industry.
Some tow operators might think they don't need garage liability insurance coverage because they don't own an actual "garage". Unfortunately, many insurance agents unfamiliar with the towing industry may agree and suggest you skip this coverage. Much of the confusion surrounding the need for garage liability results from the insurance industry's definition and use of the term "garage".
It can mean any physical location of your towing business—service station, parking lot, storage area, etc. It extends to day-to-day business operations (necessary or incidental), stock, products, and contents associated with the business. Garage liability not only covers risks directly associated with a "garage" but those associated with its operations regardless of whether you own a "garage" or not.
Who Needs Garage Liability Insurance?
If you’re in the automotive industry or perform garage operations where you handle a customer's vehicle, you’ll likely need this liability coverage:
- Auto Body Repair Shops
- Auto Repair Shops
- Tow Truck operators
- Auto Glass Installers
- Oil Change Services
- Car Detail & Cleaning businesses
- Emissions testing sites
- Interior restoration companies
- Service stations
What is Excluded from Garage Liability Insurance Coverage?
The policy will not cover injury to your employees or damage to the garage itself. It also doesn’t cover any damage incurred to a customer’s vehicle (see supplemental coverage below).
What Is The Difference Between Garage Liability and Garage Keepers Insurance?
Garage liability insurance covers third-party bodily injury and property damage that is incurred during the course of business. Garage Keeper Insurance is a supplement that covers damage to customer’s vehicles while in the care of your business. This includes damage caused by fire, vandalism, theft, or collision. There are 3 basic coverage options that we outline in our comprehensive guide on Garage Keeper’s Insurance.
Other Coverage Options To Consider
There are a few additions you should consider bundling with your garage liability insurance:
Workers Compensation Insurance: You need to include workers’ compensation in your business coverage if you have employees. It covers medical expenses and other costs associated with illness or work-related injuries.
Commercial Auto Insurance: This should be included in your business policy if you own vehicles used during the course of business—including cars provided to customers and tow trucks.
Garagekeepers Insurance: Outlined above, this additional policy is essential to protect you should you damage customers vehicles or property during the course of business.
Business Interruption Insurance: This insurance coverage compensates you if you experience a loss of income due to something outside of your control, such as a downed power line that causes your business to lose electrical, internet, etc.
Commercial Property Insurance: Commercial property insurance covers the cost of repair or replacement in the instance of property damage.
How Much Does Garage Liability Insurance Cost?
Check with a knowledgeable insurance agent for any applicable state, municipal, federal laws, or codes governing garage liability requirements as they relate to your towing operations. For example, in Illinois, tow truck operators are required to carry garage liability in order to operate legally. There are several variables affecting the cost of coverage, including:
- Location(s) of your towing operation (each 'garage' must be covered)
- Size of your business
- Type of towing vehicles owned, age of vehicles, condition, etc.
- Number of employees, their age, driving records and years of experience
- Radius of operations
- Lot protection (perimeter fencing, covered lot, well lit, paved, security, etc.)
Be certain to check your Garage Liability coverage for any exclusions or limitations which may have been written into the policy. Protect your investment and livelihood by reviewing your policies annually (at a minimum) with your insurance agent to ensure you have adequate tow truck insurance.
Get a Commercial Insurance Quote
Insurance for auto repair shops doesn't have to be complicated. Simply complete the form at the top of the page for a free quote. Or give us a call at 1-877-907-5267 and one of our agents can speak with you about the coverage you need. They'll help set you up with the best policy for you and your business.
Related Articles: Tow Truck Insurance, Garage Keepers Insurance, Commercial Auto Insurance