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Garage Keepers Liability Insurance, Who Needs It?

A business that handles cars owned by others needs garage keepers liability insurance as well as commercial liability coverage. Typical businesses that need garage keepers liability insurance include vehicle repair shops, service stations, vehicle dealerships, tow truck operators, and parking garages. A typical commercial liability insurance policy does not cover damage done to vehicles that are not owned by the insured party.

Basic coverage:

The owner’s business liability policy covers mishaps that happen in the facility. If a customer brings his or her vehicle into a shop for service and should slip and fall on an oil spot, medical care up to the limit of the policy will be provided. Although the personal injury is a primary concern, general liability policies also cover the business operations.

The objective of business liability insurance is to protect the assets of the business against a claim from anyone alleging damages; the policy covers legal expenses in the event of a lawsuit.

Garage keepers coverage:

Whereas general liability insurance protects the business assets, garage keepers liability insurance only covers vehicles that are under the care or custody of the subject business. In many cases, both policies form a common insurance package, but the cover limit applicable to the garage keepers portion is based on the value and number of vehicles normally in the custody of the business.

There are three levels of this type of liability insurance:

  • Basic cover: Coverage is provided to the insured when an employee is directly responsible for damage to a car owned by a customer.

  • Direct primary: Basic coverage focuses on damage; direct primary coverage includes such things as theft.

  • Direct excess: Direct excess covers both the basic coverage and direct primary coverage.

If you have a business that takes responsibility for vehicles owned by people other than yourself, talk to your insurance agent about both garage liability and garage keepers liability; you will most likely need both. For more info visit Boardwalk Insurance Group, LLC.