Owners of garages and auto repair shops need business insurance to protect their assets from the risks associated with making repairs to other people’s vehicles. Any kind of injury, error or property damage can result in a costly claim or lawsuit.
But with appropriate business insurance tailored to your needs, you can face your risks and stay in business for the long term.
Customers Entrust Their Vehicles to Auto Repair Shops
Automotive repair shops, car mechanics and auto body shops are not only entrusted to fix their customers’ cars, but they are also entrusted to keep those cars safe while in their control. In addition, auto repair shops face the following types of business risk:
- Slips and falls
- Worker illness or injury
- Faulty workmanship or parts
- Fire, bad weather, vandalism or theft
- Damage to a customer’s vehicle while in your care
- Employee theft or crime
- Business interruption
You need a variety of business insurance policies to protect your business from these risks. In addition, garage liability insurance and garagekeepers insurance help you protect your customers’ property and your business in the wake of accidents, injuries or property damage.
Basic Business Insurance for Auto Repair Shops
Auto repair shops should work closely with an independent insurance agent to determine their need for the following types of business insurance:
- Business property insurance protects you if a fire, vandalism, smoke, theft or other event damages your property. It provides coverage for lost inventory, office equipment, computers and more. Most business property policies also include business income – or business interruption – coverage. This pays for rent, employee salaries and other expenses if your shop must close temporarily due to an unforeseen disruption.
- Commercial general liability (CGL) insurance provides protection for most basic liability issues that a garage or auto repair shop could face. It protects you from the costs of lawsuits related to accidents, property damage and a variety of other mishaps. You will likely want to consider garage liability insurance, which provides several forms of liability insurance more specifically designed for the needs of garage and auto body shop owners.
- A business owners policy, or BOP, is a package policy designed for small businesses. It combines property, liability and business interruption coverage in one affordable policy.
- Employee theft and crime coverage protects your business from the costs of theft, dishonesty and fraudulent acts committed by a single employee or a group of employees.
- Business auto insurance is particularly important for auto repair shops in order to cover any vehicles that your business owns. In addition, you need nonowned auto insurance if you have any employees who drive their personal vehicles for business purposes.
Since auto repair shops vary significantly in the services they provide, you must work with your insurance agent to determine if you need some type of specialty insurance product. These special products combine relevant business insurance policies into one comprehensive package that includes coverage such as the following:
- Tow Truck Insurance
- Body Shop Insurance
- Repair Shop Insurance
- Muffler Shop Insurance
- Radiator Services Insurance
- Transmission Repair Insurance
What Is Garagekeepers Liability Insurance?
Garagekeepers liability insurance is specialty business insurance coverage designed for auto repair shops as well as service stations, auto body shops, detail shops, vehicle electrical and repair shops, auto glass installers, oil change and lube shops, emissions testing sites, and just about any other type of establishment that provides parts or service for vehicles and provides temporary storage for those vehicles on-site.
Garagekeepers liability insurance protects you if a customer’s vehicle is damaged due to your negligence while it is in your care, custody or control. This protection is not included in the standard garage liability policy. There are a number of ways in which a customer’s vehicle can be damaged while in your possession such as fire, theft, weather events, vandalism, employee test drives and lift accidents – to name a few.
Garagekeepers liability insurance does not cover the contents of a customer’s vehicle, nor does it cover damage that occurs as a result of faulty workmanship, parts or insufficient warrantees.
Workers' Compensation Insurance Is Essential for Auto Repair Shops
Accidents happen, even in the safest workplaces. Auto repair shops are dangerous places, particularly for the employees who do the work. The potential for smashed hands and crushed limbs from machinery or falling vehicles is with you and your employees every day. And if one of your employees gets injured while on the job, he or she may not be able to work until fully recovered.
Workers’ compensation insurance protects your employees and your business from the costs associated with work-related injuries and illnesses. It provides coverage for medical care and income protection for an injured worker while he or she is unable to work. Workers’ compensation insurance also helps protect employers from lawsuits by injured employees.
Each state has workers’ compensation insurance laws. Most states require nearly every business that has employees to provide this coverage. Your state’s workers’ compensation statutes determine the amount of benefits injured workers are entitled to, which impairments or injuries are covered, how those impairments will be evaluated and how medical care will be delivered.
Talk with your business insurance agent about workers’ compensation insurance. Your agent should be able to educate you about your state’s workers’ compensation requirements and help you find adequate coverage.
How to Become a Preferred Body Shop for Insurance Companies
Insurance companies typically keep lists of preferred body shops for their customers. If a customer is in an accident, the insurance company will offer its list of local preferred shops as a resource for the insured if he or she is unsure of where to go for repairs.
Body shops that welcome the insurance company referrals must adhere to certain requirements. In general, body shops must be able to show proof of consistent, honest, fast and good quality work that results in happy customers. What’s more, body shops must accept the insurance company’s scheduled rates for certain types of repairs, with the goal of making the process simple, straightforward and convenient for the customer.
Body shop owners need to apply with individual insurance companies and meet their requirements in order to participate.
How to Find Auto Repair Shop Insurance Tailored to Your Business
You may have some things in common with other businesses, but in many ways your business is unique. Don’t trust your business – your livelihood – to a faceless quote or an insurance company representative that doesn’t know the ins and outs of your business. Take time to find a local, independent agent who will get to know you and your business.
Independent agents can work with numerous reputable insurance companies that specialize in your type of business. Together you can review a variety of proposals and choose the best mix of coverage that meets your needs and budget.
Contact an Independent Insurance Agent today.