If you’re working in the auto services industry, you’ll eventually come across the terms garage liability and garagekeepers liability coverage. Confused? Don’t worry; even people who work in the insurance industry can find it unclear.
While these two kinds of insurance sound the same at first glance, they’re quite different. Essentially, they’re designed to work together to create comprehensive coverage.
Read on to learn the difference between garage liability vs. garagekeepers liability insurance, so you’re in the know about how they protect your business.
What is garage liability insurance?
Garage liability is one of the first types of coverage bought by auto industry business owners. It provides financial protection if you’re held responsible for common accidents that happen in garage operations, such as a customer slipping and falling in your shop or damaging a customer’s property.
For example, say you’re driving a vehicle on your lot, and you hit another car. Garage liability covers the damage to the other vehicle (not the one you’re driving).
With NEXT, garage liability is automatically included for auto service and repair businesses when you purchase general liability coverage.
What is garagekeepers liability coverage?
Garagekeepers liability insurance is for vehicles you have in your possession but don’t own — such as your customer’s vehicles. It covers the damage of vehicles you’re servicing.
For example, a customer dropped off a car for servicing. Your mechanic is driving it into the service bay and accidentally hits a bollard, putting a dent into the car. Garagekeepers liability coverage would cover the repairs to the body of the vehicle caused by the bollard.
NEXT also includes garagekeepers liability insurance as base coverage within our general liability Pro and Pro Plus packages.
Garage liability vs. garagekeepers liability: What’s the difference?
Now that you understand what the two insurances cover let’s look at the differences.
Garage liability protects your business from liability if a covered accident happens in the course of business operations. Garagekeepers liability insurance helps pay for covered damages to the customer’s vehicles.
Garage liability doesn’t cover cars that are left in the care of the shop; it covers liability for certain business operations and use of autos. Garage liability helps protect your business from some garage-related lawsuits due to your having a business.
Garagekeepers liability insurance provides you with financial protection if you accidentally damage a customer’s vehicle. Whether the car is being worked on or is being stored, this protection helps pay for covered damages if the car is left in your care.
Should I get garage liability or garagekeepers liability insurance?
If you’re just getting started, you’ll need garage liability insurance. It’s a standard policy and is often required for most auto service provider operations.
Because it covers the basic risks business owners face every day, garage liability is a fundamental general liability insurance policy for auto-related businesses including (but not limited to):
- Auto repair
- Auto body
- Car washes
- Tire shops
- Oil change stations
- Auto parts stores.
Garagekeepers liability insurance is also critical when working in an auto-related business. Think of garagekeepers liability as providing an additional cushion to protect your shop. As you expand your business — maybe renting a bigger space or adding another bay — garagekeepers liability helps protect your customers’ vehicles.
How NEXT helps auto servicing and repair businesses
Knowing the difference between garage liability vs. garagekeepers liability can help you make better coverage decisions. NEXT takes care of the rest and simplifies insurance so you can focus on your business.
We create affordable, customized auto service and repair insurance packages to meet your business’s needs, subject to the policies terms and conditions.
Our basic package allows new owners to start with the essentials for their business so you can operate with peace of mind. With our online application, you can see policy options, get a quote and buy coverage — all in less than 10 minutes.
Our licensed, U.S.-based insurance professionals are ready and waiting to help if you have questions.