Garage Insurance

A comprehensive garage or auto dealership insurance policy is a specialized package designed to provide comprehensive protection for businesses that sell, service, or store vehicles. It goes beyond standard business insurance, incorporating various coverages specifically tailored to the unique risks and needs of the auto industry.

Base Coverages

The specific coverages included will vary significantly depending on the type of business, its size, location, industry, and specific risks. However, there are some general categories of coverage that are frequently found in many business insurance policies:

Liability Insurance

• General Liability: This comprehensive coverage forms the cornerstone, protecting against claims of bodily injury, property damage and personal injury to others arising from your business operations, products, or premises. Even if a lawsuit against your business is ultimately found to be invalid, General Liability covers your legal defense costs and includes attorney fees, court costs, and other associated expenses. The most common coverages include: Show More....
  • Bodily injury: Covers medical expenses, lost wages, and other costs associated with bodily injuries sustained by others due to your business activities, on your premises, or by your products.
  • Property damage: If your business activities (including employees, vehicles, or products) damage someone else's property, this covers repair or replacement costs.
  • Personal & Advertising Injury: Covers legal defense costs and damages awarded to others due to non-physical injuries stemming from your business activities, including libel and slander, copyright infringement and wrongful eviction.
  • Products and Completed Operations: Protects against claims alleging injuries or property damage caused by defective products your business manufactures, distributes, or sells. It is essential for businesses that manufacture, distribute, or service products.
  • Hired and Non-Owned Auto: Typically covers liability only coverage arising from rented, leased, or employee-owned vehicles used for business purposes.

Property Insurance

• Commercial Property Insurance: Covers the repair or replacement costs of your main building, rented offices and any owned structures like garages or storage sheds as well as the furniture, equipment, inventory, and other business belongings inside your building.
• Business Interruption: This can help cover lost income and operating expenses if your business is forced to close or operate at a reduced capacity due to a covered event like a fire, natural disaster, or power outage.
• Inland Marine Insurance: While some standard insurance covers property at a fixed location, Inland Marine covers property while in transit, such as goods being shipped or transported. This is sometime referred to as Business Equipment Protection.

Common Additional Coverages:

• Commercial Auto Insurance: Covers your business vehicles for collisions, comprehensive damage, liability, and medical payments.
• Garage Liability: Covers bodily injury or property damage caused by an incident out of garage operations.
• Garagekeeper's Legal Liability: Covers property damage or theft of customer vehicles in your care, custody, and control (e.g., repairs or storage).
• Dealers Open Lot Insurance: Also called Fleet Coverage, protects your vehicle inventory against accidents on the road (comprehensive and collision), theft, vandalism, fire, extreme weather, and other covered perils. This includes used, new, demonstrators or service vehicles.
• Workers Compensation Insurance: A mandatory insurance program in most states that protects both employees and employer by providing medical care and wage replacement benefits to employees who are injured on the job. The most common additional coverages included are: Show More....
  • Employers Liability: This coverage protects your business if an employee sues you for a work-related injury or illness, alleging that your negligence contributed to their condition. It covers medical expenses, lost wages, and legal defense costs associated with such lawsuits.

Optional Coverages to Consider:

• Cyber Liability: Covers costs associated with data breaches, including legal fees, notification to affected individuals, and credit monitoring. This is especially relevant for businesses that store customer information, like credit cards or other sensitive information online or on-premise.
• Crime Insurance: Protects against financial losses stemming from fraudulent activities like employee theft, embezzlement, forgery, credit card fraud, or burglary and robbery.
• Employment Practices Liability: Protects against lawsuits alleging discrimination, wrongful termination, or other employment-related issues.
• Ordinance and Law Coverage: This covers additional expenses incurred if you are required to upgrade or rebuild your property to comply with building codes following a covered loss.
• Professional Liability Insurance (E&O): Protects against financial losses if you or an employee makes a mistake in their work or offers incorrect advice. This covers situations like bad vehicle recommendations or financing errors.
• Pollution Liability: Provides coverage for losses or damages resulting from unexpected releases of pollutants, typically excluded in general liability and property insurance policies.

Who needs it:

• Auto dealerships: Protects against customer vehicle damage, theft, and accidents during test drives, repairs, and storage.
• Auto repair shops: Covers potential damage to customer vehicles during repairs and protects against claims for errors or mistakes.
• Car washes and detailers: Provides liability coverage for accidents or damage to vehicles during the washing or detailing process.
• Towing companies: Protects against damage to vehicles during towing, transportation, or storage within their impound lot.
• Other automotive businesses: Gas stations, parking garages, valet services, and businesses performing vehicle services can benefit from this coverage.

Remember: Consult an insurance professional to assess your specific needs and recommend the most suitable coverage and limits. Review policy terms carefully and understand exclusions and limitations to avoid coverage gaps. And maintain accurate records by documenting vehicle inventory, employee training, and safety procedures for potential claims support.