All businesses need liability insurance, but some specific industries may require specific insurance policies such as liquor liability, employer’s liability, contractual liability, and third-party liability.
While many small businesses can benefit from a commercial general liability insurance policy, car garages, mechanics, and other businesses in the auto industry may benefit more from garage insurance. But what’s the difference between a garage liability and general liability?
Garagekeepers vs. Garage Liability: What Is the Difference?
The difference between a garage liability and garage keepers insurance is a multipurpose policy that protects small businesses from various common risk areas of any business auto policy. Most have a garage coverage form or a customer’s auto policy left.
Most business owners take out a general liability insurance policy to protect their business from lawsuits related to injuries, damage to client property, and accusations of false advertising by garage keepers. The garage liability policy defines the garage operations of garage keepers.
The insured’s garage policy covers liability for operations and the customer’s car, but damage to customers’ vehicles while on the property is covered by Garagekeepers.
How Does Garage Liability Insurance Company Policy Work?
One difference between a garage liability and general liability is that garage keepers insurance is necessary to safeguard the company of small business owners from third-party lawsuits, regardless of the size of the auto shop, leased autos, borrowed or hired auto, garage owner specifically, or other autos covered. It, however, does not always cover all types of damages.
Car or auto dealers doing auto business can avoid any coverage gaps resulting from individual policies by having a general policy with the help of insured contracts.
Clients can use the following list of coverages to determine which is best for them. In general, having general liability insurance is a standard requirement for most businesses.
This type of garage keepers insurance policy covers the direct physical damage or loss to a customer’s vehicle caused by a covered event to the property of others in terms of garage risks, including a customer’s car. the use of a garage form covers the damage done to the auto Taking precautions to prevent exposures and claims can improve your reputation, build more trust with customers, and improve your bottom line.
Bodily injury or death resulting from an occurrence related to garage operations or legal liability may arise from such events. It protects garage operations and the accountability of business-owned vehicles. General liability of the garage keepers’ insurance does not include auto coverage, but it does cover the risk of liability for third-party physical or property harm, like damages to a customer’s vehicle.
Garage keepers insurance is different from general insurance. For garage keepers insurance or legal liability, the components of the policy are specific to the automotive industry. Including damage from fire, theft, severe weather, and vandalism, garage keepers insurance guards clients against such risks.
However, this garage keepers insurance policy does not protect against garage risks and damage brought on by issues like defective parts, labor, or outdated warranties.
The contents of your client’s customers’ mobile equipment vehicles are not included in the basic garage keepers’ insured liability and insurance policy.
While adding an endorsement to a policy to extend coverage to personal property—say, items in a glove box—doesn’t always eliminate the risk of liability exposure, it does safeguard reputation.
Garage liability insurance provides coverage for claims related to injuries, physical damage insurance, and property damage to customers’ vehicles related to garage operations or services provided by the garage.
With this garage keepers insurance, garage owners will have coverage for any unexpected costs that may arise due to their business operations.
Keys Covering of General Liability
General liability insurance will cover and properly insure four types of legal liability risks where liability exposures are observed through direct primary coverage.
Product liability is the physical damage that a product or service may cause. Also, garage liability covers bodily injury that refers to a third-party injury sustained due to business operations; tenant liability is any damage to the property or customer’s vehicles occupied by your business; and advertising injury is related to false advertising or defamation claims.
With general liability, coverage in these four risk areas will save you from expensive legal fees and help your business recover more quickly if any claims are made against you. Without general liability insurance, it’s very difficult for a small business to recover from these claims without being covered by auto.
Garage liability covers several commercial general liability forms. However, many of the features of garage liability insurance may appear similar to those of general liability; the nuance of the policy details is where you will find the key differences between these two policies.
Garage liability insurance also covers four specific areas, including:
Third-party injuries refer to people who sustained personal injury as a result of your business operations. This does not include your employees, who a different insurance policy should cover.
Suppose a customer or other person unrelated to your business is injured at your garage. In that case, the insurance company will need insurance or business auto forms to cover any fees related to their treatment.
For example, if a customer slips on oil or is otherwise injured while in your garage, you are responsible for ensuring they have proper treatment to cover bodily injury. Failure to pay for hospital and surgery fees: Your insurance policy will cover the cost, so you can avoid financial pitfalls.
Third-Party Property Damage
Garagekeepers’ liability deals exclusively with third-party personal property or personal damage, such as vehicles brought by customers.
Legal liability coverage of the land motor vehicle, employee-owned vehicles, or customer’s vehicles provides insurance for the damage or destruction of property on covered autos.
If autos rented from the garage are damaged because of employee negligence or as part of business operations, the garage owner is responsible for paying for that damage.
It also covers businesses that market goods and services produce goods, operate restaurants or stores, offer professional advice, own rental property, or engage in any other activity that might endanger third parties and excludes damage.
Here, the third party may consist of patrons, visitors, or facility users.
To guard against damage or bodily injury, most businesses include public liability insurance in their garage keepers insurance policies. Third-party insurance is essentially a form of liability insurance. One of the most common types of third-party insurance is automobile insurance, according to the garage liability policy.
Automobile third-party insurance protects the insured from claims arising from property damage or injuries caused by the driver of an uninsured vehicle. The driver who caused the damage is the third party.
The most common or primary direct example of third-party damage at a garage is scratching or dinging a vehicle or leased auto, either while moving the vehicle to another area of the garage or as a result of tools harming the vehicle during repairs.
If a client’s car is damaged while in the care of a garage, then the client has grounds to claim damages. Clients have the right to compensation if their car sustains damage while in the garage’s care.
The items sold at garage operations are typically repaired items for customers’ vehicles, meaning all products sold by your business must be of good quality and have comprehensive coverage.
Selling defective automobile parts (even unintentionally) or using parts for repairs that are not appropriate for a specific car can create costly damages. This physical damage insurance will help you with legal liability coverage and garage liability coverage to cover the costs of any repairs and protect you from legal fees from a lawsuit or other claims.
Like any other business, your garage business or garage operations are also vulnerable to direct primary liability claims arising from autos. Liability claims in this policy may also be related to employees.
Sometimes, liability claims include accusations from clients who claim they have been treated unfairly or when someone accuses you of being accountable for property damage or other people. Protection from liability claims will help you settle damages if your business is found liable. Third-party liability, like liquor liability after the customer’s auto, leaves your garage, is not covered by autos and, as such, is not liable for insurance.
Differences Between Garage Liability and Garagekeepers Liability Insurance
Although we’ll explore this topic in greater detail later, consider the garage policy combined with business auto coverage and commercial general liability coverage.
Garages generally have auto-exposures of their ownership, non-operated and employed businesses, property and operations, contracts, travel, and product and completed activities. Instead of requiring separate policies, garage policies let you combine coverage in one form as storage location insurance.
Types of garage keepers coverage
It is important to understand the types of garage keepers you select per insurance policy to ensure your organization’s safety and success. Garage insurance, per coverage, generally provides three main or properly insured options. It covers damages resulting from negligence or mistakes by employees.
Unlike direct primary coverage, direct excess is effective no matter the fault. The financial coverage goes to repair or replace the item stolen, or to pay for damages caused; it will cover the excess amount that the owner’s original policy does not cover.
However, this direct excess policy will not cover all losses or damages and only covers excess amounts covered by the owner’s policy.
What is the difference between garage and garage keepers’ liability?
The difference between garage liability insurance and garage-keeping coverage is between liability and physical damage coverage.
The first covers the insurance’s operating losses and the vehicle’s damages, and the second protects customer damage.
General liability policies are suitable for most people and integral to a business. Garage insurance is an extremely special form of general liability coverage for automotive firms operating in the automotive industry.
What Businesses Require Garage Liability?
Garage liability insurance is tailored insurance, which means it’s most appropriate for businesses in the automotive industry.
While repair garages are likely the most common business to use this incur, other automotive businesses would benefit from this policy. Some examples include:
- Auto body customization and paint shops
- Detailing and car cleaning
- Auto glass installers
- Electronic repair
- Emission test shops
- Impound lots
- Restoration shops
- Parking garages and lots
- Tow truck operators
- Tire shops
- Service stations
- Valet services
- mobile equipment
Essentially, any time a business or employee handles the third-party automotive property of a client, this specific insurance policy is good for overall coverage. Even if any employee will only be handling a vehicle for a short time, this coverage is necessary since vehicle-owned repairs can be very expensive.
What Is Garage Keepers Insurance?
Although the insured’s liability and garagekeepers’ insurance seem like similar policies, it’s important to understand the distinction between them. Garage keepers insurance is a policy specifically for a garage business that takes temporary custody or care of a customer’s vehicle by an auto dealer, which is not something all automotive-related businesses will do.
With garagekeeper insurance policies, the details of the policy specifically cover property damage related to accidental collision damage, fire, extreme weather, vandalism, or theft.
If a client leaves their vehicle in the custody of your business, with respect to the garagekeepers liability insurance you are responsible for ensuring the customer’s vehicles are returned to them in good condition. Without this insurance, you may be on the hook to pay the full replacement and repair costs.
Do You Need Both Garage Liability and Garage Keepers Insurance?
This depends entirely on your garage business operations. Certain businesses, such as service stations, dealerships, or certain repair shops, may not need this type of insurance. But some other businesses may have overlap in their business operations that will result in the business having temporary custody of a vehicle to complete certain repairs.
For example, suppose a repair takes several days. When customers’ vehicle keys are handed over, your garage business takes temporary custody of the vehicle until the repair is complete.
If any damage is sustained to the vehicle that is not related to normal business operations, then you will need a garagekeepers insurance policy to cover the damages. An insurance expert can advise whether or not you need both policies.
People trust auto repair shops, garages, and towing companies to keep their cars safe from damage when they bring their vehicles to them for maintenance or repair.
As a rule, it’s important to ensure that the vehicles you service and repair are kept in a secure environment, and it’s crucial to have a procedure in place that covers any accidents that may happen while the vehicles are in your care, necessitating the need for both garage liability and garage keeper’s liability to shield your customers from financial loss.
Do You Need Both Garage Liability and General Liability?
Sometimes, you may only need garage liability coverage or garage operations-covered autos to cover your business operations. However, some automotive businesses have enough crossover that it may be necessary to have both types of insurance policies.
For example, car dealerships with on-site service centers may benefit from having both types of insurance since garage liability would not necessarily cover claims made on the car-selling portion of the business.
What Does Garage Insurance Not Cover?
Generally speaking, while garage liability insurance covers third-party claims against your business, it will not provide the same protection for your garage business or your employees.
For example, garage liability excludes property damage involving your business building, tools used for garage business operations, other garage business property, employee injury, a customer’s vehicle, or other personal damages.
To cover these types of damages, you will need additional insurance policies. Some common policies include employment practice or professional liability coverage, worker’s compensation, and other business owner’s insurance.
The insurance policies you choose should be based on your business’s needs.
Why Do You Need Insurance for Your Business?
The most obvious reason to secure a good insurance policy for your business or garage operations is to avoid expensive financial compensation for any claims against your business or your employees or not covered autos. Recovering from third-party personal or property damage can be expensive, particularly for small businesses.
As a business owner, you must ensure that your workplace is safe and respectful for all parties involved. Your business activities have the potential to affect these stakeholders in serious and costly ways, and business insurance protects you financially from some of these consequences.
Business insurance can help mitigate potential legal issues and financial losses and provide a cushion for unforeseen events that could lead to financial liability. But in addition to this, you may need the correct insurance for your auto business to comply with local, state, or federal regulations to run your business.
Businesses in the automotive industry generally require different types of coverage than other businesses, such as garage operations covering autos. Because automotive businesses handle third-party property to complete automotive repairs, it’s necessary to have a comprehensive garage insurance policy to provide coverage for any liability claims.
Some automotive businesses may even require a combination of different insurance policies. Contact us for more information about garage insurance for your business