Small businesses are the backbone of the American economy, and automotive small businesses are no exception. These hardworking people keep America moving by repairing and servicing our cars. But even the smallest business can be at risk for liability claims, which is why garage insurance is so important.
Why You Need Garage Insurance
What Is Garage Liability Insurance?
Garage liability insurance is a type of umbrella insurance policy that covers the risks associated with automotive businesses and potential issues that impact third parties, like customers or visitors. It’s specifically targeted toward the automotive industry and understands the nuances of the work involved.
Dealerships, tow-truck operators, parking lots or parking garages operators, auto service stations, auto detailers, emissions testing centers, custom auto shops, and repair shops are candidates for this type of coverage.
Why Is Garage Liability Insurance Important?
Garage liability insurance can protect you from lawsuits arising from third-party property damage, third-party bodily injury, product liability, and more. In short, it protects you from any legal claims from third parties that might arise as a result of your automotive business activities.
What Does Garage Liability Insurance Cover?
There are multiple types of garage liability policies. Some policies cover more than others, so it’s important to read the fine print and ask questions before signing any contracts.
Product Liability
As an automotive small business, you’re at risk for product liability claims. These are legal claims that might arise as a result of the products you manufacture, distribute, and/or use. Product liability is a type of legal claim that arises when someone is injured or their property is damaged as a result of a defective product. The person making the claim can sue the manufacturer, distributor, or retailer of the product for damages.
Products can be defective in many ways, including design flaws, manufacturing defects, and inadequate warnings or instructions. In some cases, the defect may be obvious and easy to spot. If a third-party person is injured as a result of using your product, even if they were not the one who originally purchased it, you could still be liable for their injuries or damages. Make sure that your garage liability insurance policy gives you coverage in this type of situation.
Property Damage
Another risk for small businesses is damage to third-party personal property. An example would be if a customer’s cell phone was rendered useless after being hit by falling equipment. A garage insurance policy will provide coverage for these types of damages. Larger items like customer vehicles are not considered covered property damage by this type of insurance.
Bodily Injury
If a third party is injured on your business premises, you could be held liable for their medical expenses. Although worker’s compensation will cover your employees, it won’t cover any injuries sustained by visitors to your shop or customers that come into the storefront. If a customer falls and injures themselves while walking around your office or waiting room area, other types of insurance might not cover their medical costs.
In addition, if a tool or piece of equipment drops and breaks a visitor’s foot, they could potentially sue you for damages related to lost income and medical expenses. Without a garage liability policy, you would be responsible for paying these costs out-of-pocket. Fortunately, a garage liability policy will protect you from claims made by visitors or customers against you for these scenarios.
Business Interruption
If your business cannot operate as normal due to an injury, property damage, or product liability claim, your business may suffer significant losses. Depending on the type of insurance claim made against you, your garage liability policy will cover any lost income you receive as a result of not being able to operate your shop or retail store. This is often an overlooked benefit. Note that note all policies will include this, so it’s important to inquire about it.
Employee Dishonesty Coverage
If a dishonest employee steals something from or vandalizes a customer’s property while under your business’ care, you will be responsible for the damages. However, you may be indemnified against this by your garage insurance policy. This is another overlooked benefit. And, much like business interruption, this is not always included with all garage liability insurance policies, so it’s important to ask about it.
What Does Garage Liability Insurance Not Cover?
Garage liability insurance does not usually cover the policyholder’s tools, employees, building structure, personal property, or commercial property. Damages caused by natural events like hail or wind are also not covered. In addition, it won’t cover a customer’s car if it is in an accident or incurs damage while onsite at your business–only third-party personal property is covered. Finally, there are usually maximum limits set.
It’s important to note that garage liability insurance is not the same as “garage-keepers” insurance. Garage-keepers insurance protects other customer property, like vehicles, while they’re in your care. This can also include damage incurred while storing this kind of property or during test drives. This type of policy will cover general vandalism and theft of their property, too. If you own a business with several locations, a separate policy is required by location.
How Much Does Garage Liability Insurance Cost?
Like with most types of insurance policies, several factors determine how much you’ll have to pay for your coverage, including the location and size of your shop, what kinds of tools and equipment you use, and whether or not you have employees working under you. You will also likely need to provide proof that you are licensed by the state in which you do business. You can customize your policy to your needs and add on what makes sense.
If you’re running an automotive business, it would be wise to speak with an insurance agent or broker about securing coverage for your garage liability needs. They will help you find the right policy at the best price based on your location, size of the shop, equipment used, etc. In general, garage liability insurance is usually affordable, cheaper than other types of insurance that aren’t as well suited to your business, and worth the peace of mind.
How To Get Started With Purchasing Garage Liability Insurance
The best way to get started with a new policy is to shop online. Insurance companies will help you compare multiple types of policies with just a few clicks. You’ll be able to get an idea of what types of coverage your business needs and how much it will cost. You can even find someone knowledgeable about regional issues and challenges. Don’t pay for what you don’t need–talk to an expert to customize the best policy for you.
Why Do Small Automotive Businesses Need Garage Liability Insurance?
If you work out of an automotive shop you must have garage insurance. Even if your shop’s small, the risk of a serious injury to a customer or visitor justifies having coverage. Also, if you work out of a garage in the back of your business, you still need this because tools and equipment are used that could damage property or cause injuries. If these types of lawsuits were to arise, you’d be responsible for paying any damages.
To put it simply, you can’t afford not to have garage liability insurance. If you’re sued, the costs can be disastrous for your business. Medical bills are costly nowadays and they keep skyrocketing. Any sizeable lawsuit could tank the business you worked so hard to build. That’s why it’s so important to protect yourself with a good garage liability policy. They’re easy to set up and won’t break the bank.
What Are the Benefits of Having Garage Liability Insurance?
There are many benefits to having a garage liability policy. Of course, the main benefit is that it helps protect your business from significant losses related to bodily injury or property damage claims made against you by employees or customers/clients. If you don’t have garage liability insurance and are found liable for damages because of negligence, then all of the assets in your business will be at stake.
There are some lesser-known benefits as well. Many commercial garage liability policies can cover other types of small automotive businesses like body shops, tire dealerships, and repair shops for contractors’ vehicles. There are even some benefits that apply if you have employees working for you who help out in other aspects of your business besides servicing cars. Check with your provider to see what extra benefits you can reap!
Never put off until tomorrow what can be done today. If you’re running a small automotive shop, you don’t want to be put off by an unexpected lawsuit. Garage liability insurance is one of the most affordable forms of insurance and there’s no downside. Protect yourself by calling Armac Insurance Services today. We pride ourselves on our long-standing relationships with customers and would love to help you figure out your appropriate insurance needs.
