Auto Repair Liability Insurance

Every auto repair shop is different, and insurance requirements will vary by the services you provide. A comprehensive auto repair shop insurance policy typically includes these coverages:

• Commercial General Liability (CGL) Insurance: CGL is a liability insurance policy for auto repair shops that protect you and your business against common claims you may run into, such as third-party property damage (damage to a customer’s vehicle) or bodily injuries (if a customer visiting your facility slips, falls, and is injured). Should your business be named in a lawsuit, CGL may cover a customer’s medical expenses and your legal fees regardless of the outcome. However, your CGL coverage limit applies to all employees of your business, not each employee. One option to accommodate all your employees is to increase your limit.

• Garage Liability Insurance: Garage liability coverage contains special endorsements that covers vehicles in the care, custody, and control of your auto repair shop. It includes third-party liability coverage if your employees need to drive a customer’s vehicle while it is in your shop’s possession.

• Commercial Property Insurance: Commercial property insurance protects your repair shop, as well as its contents (including your inventory) from insured risks that occur beyond your control, like a fire, theft, or flood. Carrying commercial property insurance gives you the option of getting business interruption coverage, which reimburses the net income lost following an insured event. It may also cover overhead costs, employee wages, and other costs associated with temporarily closing your business. However, business interruption coverage does not cover income lost due to a pandemic, infectious disease, or government-mandated closure.

• Tools and Equipment Insurance: Your tools and equipment are likely your most important assets, making equipment and tools insurance critical. This policy provides coverage to replace, or repair lost or damaged equipment and tools, accessories, or others’ property in your care. Anything valued at less than $1,500 is considered a tool, whereas anything above is considered equipment.

• Cyber Liability Insurance: Cyber liability insurance is one of the most critical coverages to have if you’re storing your customers’ data. While your customers will visit your auto repair shop, if you offer customers the opportunity to make a reservation online that requires them to include personal or financial information, it is your responsibility to protect their data. Cyber liability insurance covers costs associated with electronic incidents, such as cyber-attacks on your computing systems.

• Pollution Liability Insurance: Auto repair shops do have an impact on the environment, and environmental liability is on the rise. Pollution liability insurance covers clean-up costs, third-party bodily injuries (such as a respiratory illness), or damage to a customer’s vehicle caused by pollution or toxic substances produced due to your work.

• Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, if your auto repair shop provides its customers with advice or consulting services, consider adding professional liability coverage to your policy to protect against claims alleging you gave incorrect information or failed to deliver a service as promised.

• Commercial Crime Insurance: Commercial crime insurance protects against theft by employees, including any losses resulting from forgery or fraud. It can be purchased as a standalone policy, or it can be added to your existing commercial general liability policy. Commercial crime coverages include money and securities (for losses due to burglary, robbery, or theft) and employee dishonesty (for losses or liabilities resulting from fraudulent acts such as embezzlement).

• Non-Owned Auto Insurance: Non-owned auto liability coverage protects your business if an employee uses their personal vehicle for work, such as picking up parts to deliver to your shop. It provides coverage for damage to another vehicle or property, and any third-party medical costs resulting from a car accident.

• Garage Keepers Liability Insurance: Garage keepers coverage is designed to protect your customers’ vehicles stored on your premises and while you or your employees are doing maintenance work or servicing them. It covers the cost of damages or losses due to fire, theft, vandalism, or severe weather if your repair shop is held liable for damages to a customer’s vehicle.

• Tenant Legal Liability Insurance: Tenant legal liability coverage insures any loss or damage to the property that you rent or occupy (but do not own) for your business.

• Leased, Rented, Borrowed Equipment Insurance: This type of coverage accounts for loss or damage to any materials and equipment you use in your auto repair shop that you lease, rent, or borrow.