Auto Body Shop Insurance

The first thing we teach our auto body shop clients is the difference between the two most valuable types of protection - Garage Liability and Garagekeepers Coverage.

Auto body shop owners often wonder where a General Liability Insurance policy ends, and a Business Auto policy begins - or vice versa. Garagekeepers coverage, for example, covers bodily injury and property damage resulting from the premises, operations, products, and completed operation - such as an accident caused by a mechanic during the test driving of a customer’s vehicle.

General Liability, covers injury or damage resulting from other auto body shop accidents - such as a customer who slips and falls in the parking lot. For a wide variety of perils, auto body shops require Business Auto protection, which covers vehicles owned by the auto body shop and vehicles owned by someone else used in the business operations.

Most commercial entities purchase two separate liability policies - General Liability and Business Auto. Garage Liability is simply a combination coverage created to cover both exposures in one policy.

What is Garage Keepers Insurance?

There is a limit to Garage Liability - an exclusion that does not cover personal property (in this case, the customers’ automobiles and motorcycles). Auto body shops require protection separate from Garage Liability for vehicles in their “care, custody or control” - a policy known as Garagekeepers Coverage.

What Are The Limits To Auto Body Shop Insurance?

Similar to Garage Liability, Auto Body Shop Coverage has limits - which are based on the number of customers’ vehicles in the care of the auto body shop and the average value of those vehicles. Garagekeepers Coverage is available in three levels: Garagekeepers Legal Liability, Direct Primary, and Direct Excess.

1. Garagekeepers Legal Liability. Imagine an auto body shop mechanic causes an accident while driving a customer’s vehicle. If the accident was the mechanic’s fault - and the auto body shop is legally liable for the damage - Garagekeepers Legal Liability provides coverage.
   
2. Direct Primary. A problem can occur, even if the auto body shop is neither negligent nor legally liable - such as a customer’s vehicle stolen right from the parking lot. An expansion of Garagekeepers Coverage, Direct Primary provides coverage and in this case, pays the theft claim.
   
3. Direct Excess. Also called Garagekeepers Excess Legal Liability, this coverage is simply a combination of Garagekeepers Legal Liability and Direct Primary.

What Type of Coverage Do I Need?

Given the nature of the auto body industry, with operations consisting almost solely of the operation of automobiles and motorcycles, both Garage Liability and Garage Keepers Insurance are ideal - to protect you from both third-party claims brought against you, and claims brought by customers whose vehicle becomes damaged in your care, custody, or control. An agent can write both Garage Liability and Garagekeepers Coverage as part of the same protection package.