Understanding Garagekeepers and Garage Liability Insurance

Whether you operate an auto body shop, own a car dealership or offer valet parking, your business likely needs garagekeepers or garage liability coverage.
Many believe these two policies are one in the same. Before you find your insurance portfolio is lacking, here’s what you need to know.
What Garage Liability Covers
Garage liability serves as a hybrid policy – commercial general liability, with a bit of commercial auto coverage – that’s specific to garage operations and auto dealers. As such, this policy:

• Covers bodily injury and property damage related to an accident arising from garage operations, including ownership, maintenance or use of the business.
• Includes the ownership, maintenance and use of all autos being stored or worked on. “Autos” in this instance applies to anything from personal cars to large tractor trailers, regardless of the number of wheels and if the vehicle is licensed for use on public roads.
• Covers any third-party claims involving the vehicle. For instance, if a worker is parking a customer’s car and hits another vehicle in the process, the policy covers the damage to the vehicle that is hit.

Garage liability comes with multiple restrictions that create major holes in your coverage:

• Any property damage related to your business’ care, custody or control of a vehicle.
• The actual vehicle in your care, custody or control. This could be any vehicle a customer drops off for repairs, a car that’s being temporarily stored in a garage or a vehicle that is being test driven.

Garagekeepers Coverage
Filling in the gaps mentioned above, garagekeepers offers coverage directly to the vehicle left in the business’ care, no matter if that car is simply being parked or being left with your business for repairs. Generally, the coverage is ideal for businesses that handle cars and trucks in some form but are not auto dealers.
You’ll have three options for coverage:

• Legal Liability: This option applies to any damage to a customer’s vehicle from the insured’s negligence.
• Direct Primary: This form of coverage covers damage to the customer’s vehicle, regardless of who is liable. Unlike Legal Liability, Direct Primary encompasses loss due to weather and theft, assuming the business made a sufficient attempt to protect the vehicle. In this case, excess coverage kicks in when the customer’s limits are not high enough or the customer doesn’t have coverage at all.
• Direct Excess: This option also covers loss, regardless of liability. However, in the instance the business exercised its best judgement, the policy will pay in excess – regardless of the customer’s coverage. For retaining business, this policy benefits your customers more, as they will not have to file a personal claim.

Do you need to update commercial coverage for your garage, dealership or auto body shop? Work with Ion Insurance to discuss the policies optimal to your operations. To begin, give us a call at 203.439.2815.