What Does Garage Keepers Insurance Cover?
A standard garage keepers policy typically includes three primary types of coverage:
Legal Liability
Legal liability is a type of coverage that is most often included in garage keepers’ insurance policies. This protects customer vehicles following damages that result from carelessness by the insured party (your business).
For instance, legal liability coverage would help pay for damages that occur after one of your employees tries to fix (or test drive) a client’s car. By law, this employee would be responsible or “liable” for the damage.
Direct Primary
Direct primary coverage protects customer vehicles regardless of who is at fault for damages. In the event of a loss not caused by the insured (e.g. losses due to theft or weather-related incidents), direct primary coverage will pay for said loss. Following incidents of theft, customers have no need to file claims and can rest assured that their vehicles are always protected.
Direct Excess
Direct excess coverage isn’t always offered in garage keepers’ insurance policies but can be extremely useful in some cases. Similar to direct primary, this coverage protects an insured party from losses to customer vehicles no matter who is liable.
However, direct excess is different from direct primary coverage because if an insured isn’t responsible for a loss, it will pay for damages above the policy’s coverage limits. Direct excess is most helpful in cases where customer vehicles sustain severe damages due to unprecedented events. For instance, should a fire destroy both a customer’s truck and your automotive business and the former carries comprehensive coverage for his vehicle, direct excess may help pay for any damages above the limits of the customer’s policy.
Garage Liability
Garage liability insurance is a policy that covers bodily injury or property damage caused by an incident out of garage operations. The policy refers to the ownership, maintenance or use of locations for garage business operations. This kind of coverage also includes the ownership and use of the autos, as well as maintenance. This kind of insurance is helpful to car dealerships who are looking to cover all autos on their lots, including cars being worked on in their mechanical garages.
Garage Insurance
If your business sells, services, stores, or parks automobiles, your general liability insurance coverage may not be enough to protect you from lawsuits. Car dealerships, body repair shops, and gas stations are specialty businesses with special insurance needs. By combining parts of a commercial general liability policy with parts of a business auto policy, garage insurance guards against the unique risks associated with your automotive business including claims for injuries, mistakes, or property damage resulting from work you have done or unknowingly defective parts that you may have installed.
