THURSDAY, MAY 4, 2017
What is Garage Liability insurance?
A policy used to insure an auto service shop, body shop or car dealership (about anything that has to do with cars honestly) is called a garage liability policy. Unlike a typical business owners policy, a garage liability provides liability coverage for both the garage operations as well as any garage-owned autos. Depending on the company, it may even be wrapped up nicely on one policy.
Who's eligible for Garage Liability insurance?
Here's several examples of types of industries that are eligible for garage liability insurance:
- Franchised (think Chevy, GM, Ford or any dealership associated with a car manufacturer) and non-franchised (independent car lots usually offering used cars) Dealerships
- Auto Repair Shops
- Auto Body Shops
- Service Stations
- Auto Storage Garages
- Public Parking Lots
- Trailer Dealers
If you sell or service items such as motorcycles, golf carts and RV's, then garage liability insurance would work here too.
What is liability anyway?
Before we get into the finer details of garage liability, it's a good idea to have a basic understanding of liability as it relates to insurance. Liability is simply bodily injury or property damage suffered by a third party as a result of your business operations. When we say third party, we mean someone other than you or your employees. It could be something as simple as a customer that falls on your property or more complicated, such as a customer's vehicle that is damaged as a result of your operation.
The two basic parts of the garage liability policy
Since garage liability insurance can provide coverage for both garage operations AND garage-owned autos, it makes sense that there would also be two liability parts. These are listed below.
Garage operations- other than covered autos- covers bodily injury and property damage caused by an accident and resulting from garage operations other than the ownership, maintenance or use of a covered auto.
Garage operations- Covered Autos- covers bodily injury and property damage caused by an accident and resulting from garage operations involving the ownership, maintenance or use of a covered auto.
Used to pay medical expenses sustained by you and/or your passengers if involved in an accident in a Covered Auto. It can also be used for small claims on premises such as a trip and fall by a customer. It can be paid without proving fault and allows these claims to be processed quicker. A limit of $5,000 is typical, although other limits may be available.
Uninsured/Underinsured Motorists Bodily Injury Liability
Protects you when someone hits you and has no insurance (uninsured) or doesn't have enough insurance to pay for your injuries (underinsured). This coverage is really only applicable to vehicles and not garage operations, so if you have garage-owned vehicles, you might consider including this on your policy.
How is Garage Liability Insurance Activated?
Garage liability insurance is written using designated auto symbols. These symbols "trigger" the coverage. Below are the standard covered auto symbols. Please note that availability of symbols is determined by the state you're in and the company providing the coverage. So, while you may WANT Symbol 21 (because it's the broadest coverage), you may find it very difficult to get because insurance companies want to limit their exposure.
In Ohio, a few of these symbols are not applicable- I've noted them where appropriate.
||Owned "Autos" Only
||Only those "autos" you own (and for Liability Coverage any "trailers"
you don't own while attached to power units you own). This includes those "autos" you
acquire ownership after the policy begins.
||Owned Private Passenger "Autos"
||Only the private passenger "autos" you own. This includes those private passenger
"autos" you acquire ownership of after the policy begins.
||Owned "Autos" Other Than Private Passenger "Autos"
||Only those "autos" you own that are not of the private passenger
type (and for Liability Coverage any "trailers" you don't own while attached to power units you own).
those "autos" not of the private passenger type you acquire ownership of after the policy begins.
||Owned "Autos" Subject To No Fault (NOTE: Ohio is NOT
a No Fault State, so you won't see this on an Ohio garage policy)
|Only those "autos" you own that are required to have No-Fault benefits in the state
where they are licensed or principally garaged. This includes those "autos" you acquire
ownership of after the policy begins provided they are required to have No-Fault benefits
in the state where they are licensed or principally garaged.
||Owned "Autos" Subject To A Compulsory Uninsured Motorists
Law (NOTE: Ohio law says Uninsured Motorists coverage is
optional, so you won't see this on an Ohio garage policy)
|Only those "autos" you own that because of the law in the state where they are licensed
or principally garaged are required to have and cannot reject Uninsured Motorists
Coverage. This includes those "autos" you acquire ownership of after the policy
begins provided they are subject to the same state uninsured motorists requirement.
||Only those "autos" described in Item Seven of the Non-Dealers' and Trailer Dealers'
Supplementary Schedule or Item Nine of the Dealers' Supplementary Schedule for
which a premium charge is shown (and for Liability Coverage any "trailers" you don't
own while attached to a power unit described in Item Seven or Item Nine).
||Hired "Autos" Only
||Only those "autos" you lease, hire, rent or borrow. This does not include any "auto"
you lease, hire, rent, or borrow from any of your "employees", partners, (if you are a
partnership), members (if you are a limited liability company) or members of their
||Non-Owned"Autos" Used In Your Garage Business
||Any "auto" you do not own, lease, hire, rent or borrow used in connection with your
garage business described in the Declarations. This includes "autos" owned by your
"employees" or partners (if you are a partnership), members (if you are a limited liability
company), or members of their households while used in your garage business.
||"Autos" Left With You For Service, Repair, Storage Or Safekeeping
||Any customer's land motor vehicle or trailer or semitrailer while left with you for service,
repair, storage or safekeeping. Customers include your "employees", and members of
their households, who pay for the services performed.
||Dealers"Autos" And "Autos" Held For Sale By Non-Dealers Or Trailer
Dealers (Physical Damage Coverages)
|Any "autos" and the interests in these "autos" described in Item Seven of the Dealers'
Supplementary Schedule or Item Nine of the Non-Dealers' and Trailer Dealers' Supplementary Schedule.
NOTE: Symbol 30 is commonly referred to as Garagekeepers insurance. You can read about Garagekeepers insurance in a separate post.
If you're an auto service shop owner or body shop owner, we welcome you to contact us with your questions. Garage insurance is our specialty- we have provided cost-effective solutions for garages for many years (and LOVE doing it) and welcome the opportunity to assist you. Visit our garage insurance page for more info and request your garage insurance quote today!
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