Auto Garage Insurance

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Auto Garage Insurance Policy Information

Auto Garage Insurance

Auto Garage Insurance. Auto garages, also called automobile repair shops, play an essential role in helping any driver maintain their vehicle.

Automotive garages offer a wide variety of mechanical services for automobiles, motorcycles, or trucks, from ongoing maintenance to engine repair to tune-ups. The garage may be stand-alone or part of another business such as an automobile dealership or filling station.

They may specialize in a specific type of automotive repair, such as brakes or transmissions, or may service other types of motorized vehicles such as recreational vehicles or snowmobiles.

Some repair or rebuild parts such as brake drums, or custom-make old, difficult-to-replace parts. Operations may include gasoline or diesel fuel sales or retail sales of automobile accessories and tools. Normally, automotive garages perform body work or painting only when incidental to other repairs.

Many auto garages, staffed by skilled and versatile auto mechanics, are able to repair malfunctions and other problems related to both the mechanical and electrical components seen in different types of vehicles, as well as performing the regular scheduled maintenance that keeps cars running smoothly and safely. Others specialize in certain aspects of car repair, such as brakes or transmissions.

Whether you already own and manage an auto garage or are, perhaps, currently a mechanic thinking about starting your own business, you will already know that auto garages never run out of customers; the car repair industry is a reliable one.

Auto garages still, however, face numerous threats, and any working day may be one during which your business is met with unexpected circumstances.

What kinds of auto garage insurance might be needed to protect against devastating financial consequences if something goes wrong? Learn more in this brief guide.

Auto garage insurance protects your shop from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked auto garage insurance questions:


How Much Does Auto Garage Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small auto garages ranges from $37 to $69 per month based on location, services offered, revenue, claims history and more.


Why Do Auto Garages Need Insurance?

Auto Mechanic In Garage

Regardless of the steps you take to keep your business safe, auto garages are, like any other business, vulnerable to a range of perils. Although you will be able to handle the costs associated with minor mishaps on your own, catastrophic events can easily prove to lead to such massive expenses that they threaten the very future of your auto garage.

Threats that have the potential to severely damage your garage and the valuable equipment and inventory inside include acts of nature (such as earthquakes and hailstorms), burglary, vandalism, and accidents such as unintended fires.

Lawsuits pose another realistic threat to your auto garage, however. Should a car that you repaired be involved in an accident, and it is alleged that your professional negligence played a role in causing it, the resulting expenses can be truly overwhelming.

In the event that you inadvertently cause damage to a customer's vehicle, you can again expected to be burdened with costs. Workers, too, may be injured on the job and attempt to hold you liable, even if their own negligence caused the injury.

To protect yourself from the financial fallout of these and other major perils, it is absolutely vital to invest in the right types of auto garage insurance coverage. Armed with this protection, your business will recover from disastrous events in no time.


What Type Of Insurance Do Auto Garages Need?

Your auto garage is unique - and your business will benefit most from a custom-made comprehensive insurance plan. Factors like the location of your garage, the number of employees you have, the exact scope and nature of your activities, and the value of your equipment all influence your insurance needs.

Because one size does not fit all, you are strongly advised to consult a seasoned commercial insurance broker. With that in mind, some of the core types of auto garage insurance that are needed:

  • Commercial Property: Your garage, the tools and equipment inside, and your inventory could all sustain heavy losses if you are impacted by an act of nature, burglarized, or hit by an act of vandalism. Commercial property insurance will help you cover the costs.
  • Garage Liability: A niche form of commercial liability insurance, this type of auto garage insurance coverage exists to allow you to recover from mishaps on your premises or caused by your activities in which a third party is injured or severe property damage occurs. Both your attorney fees and any settlement costs are covered.
  • Garage Keepers: This kind of insurance safeguards your business if a customer's vehicle is damaged while it is in your care, by taking care of the expenses that follow.
  • Workers Compensation: Auto garages that employs workers needs to carry workers' comp insurance, which covers the medical bills and any lost wages of employees who sustain work-related injuries. In the process, having this insurance also greatly reduces the risk that an injured employee will sue your auto garage.

These essential forms of auto garage insurance coverage will go a long way toward protecting any garage from severe financial losses if they are affected by a major peril.

Because your garage may have additional insurance needs, however, it is important to talk your risk profile through with a commercial insurance broker who understands your branch of commerce.


Auto Garage's Risks & Exposures

Car On Lift In Garage

Commercial auto exposures may be limited to hired and non-owned for employees running errands to pick up needed supplies. If there are owned vehicles, all employee drivers should have an appropriate driver's license and their MVRs should be regularly checked. There should be written procedures for personal and permissive use of vehicles furnished to employees.

All vehicles must be regularly maintained with records retained. Towing presents a more serious exposure due to the potential for damage to the vehicles being towed. All tow truck drivers must be experienced. Towing vehicles must be regularly checked, particularly the hoists and tow bars.

If vehicles are rented to customers, the garage should keep a copy of the renter's driver's license and proof of insurance. The rental contract should identify all drivers and state that unlisted, unlicensed, or minor drivers are not permitted to operate the vehicle. It should also include a hold-harmless agreement in which renters agree to assume responsibility for the operation of the vehicle to limit the garage's exposure to vicarious liability only.

If a collision damage waiver is offered, the customer's signature is needed to document whether this was purchased or declined. The customer should also be required to sign a pre-inspection form to minimize disputes when the vehicle is returned with damages.

Vehicles that are rented should be inspected and reconditioned before being rented again.

Garagekeepers exposure comes from damage that can occur to customers' vehicles while in the repair shop's care, custody and control. Keys to customers' vehicles should be kept in a locked box to prevent unauthorized use. Proper identification should be required to prevent handing a customer's car to the wrong owner.

Lots must be well lighted with chains in place to prevent transport. Fences and other security also may be appropriate.

Premises liability exposure is high due to the number of visitors to the garage. Waiting areas should be provided for customers waiting on repairs. Customers must not be permitted in the garage area. To prevent slips and falls, floor coverings should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring.

Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure. There should be a disaster plan in place for unexpected emergencies. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.

If the premises is open after dark, there must be adequate lighting and appropriate security for the area. Cars in the parking lot present an attractive nuisance hazard. Chains may be required to prevent entrance after hours.

Personal injury exposures include allegations of discrimination and from apprehending suspected shoplifters, which may result in claims of assault and battery, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises.

Products liability exposure can be high due to the potential for an accident in the event that a vehicle is not properly repaired. There should be a check-off procedure in place prior to release of the vehicle to the customer to prevent its return with any vital functions not working properly.

If the garage directly imports or reconditions items for resale, the exposure increases to that of a manufacturer.

Environmental impairment exposures can be very high due to the disposal of used lubricants, oils, degreasers, solvents, batteries, and tires. Spillage and leaking of pollutants into the air, ground, or water can result in high cleanup costs and fines.

Adequate procedures should be in place and must be followed to prevent any leakage or contamination. Contracts should be in place to dispose of all environmentally dangerous chemicals.

Workers compensation exposures are very high. Brake turning, welding or other repair work must be handled only when appropriate safety equipment, especially eye protection, is available. Lifting of a vehicle by hoists, jacks, and other mechanical means can result in injury should the equipment malfunction. Hoists must be well maintained and procedures in place to prevent vehicles from falling.

Workers can slip and fall, or incur back injuries, sprains, strains or hernias from lifting. If the shop sells batteries, leakage or spilling of battery acids can cause burns on contact with skin and respiratory problems when inhaled.

Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. Employees performing maintenance or repair work on customers' vehicles should be properly trained.

Property exposure is high due to flammables such as lubricants, oils, degreasers, and solvents used in the repair operations. They must be properly labeled, separated, and stored away from combustibles. Aerosols and flammable additives contribute to the overall fire load.

Welding needs to be evaluated for proper handling of the tanks and gases, as well as adequate separation from the other operations with either a separate room or flash/welding curtains.

Tires do not catch on fire quickly; however, when they do burn, the fire is difficult to put out and an oily smoke permeates the entire area. Smoking must be prohibited.

All machinery and equipment must be inspected and maintained regularly to avoid wear and tear or overheating losses.

Vehicle parts are target items for thieves. Appropriate security controls must be taken including alarms, lighting, and physical barriers prohibiting access to the premises after hours. Premises alarms should report to a central stations or police department after hours.

Equipment breakdown exposure is high as the business is dependent on its machinery for conducting operations. Replacement parts may be difficult to obtain on a timely basis.

Inland marine exposures are from accounts receivable if the garage offers credit, computers to monitor inventory and for diagnostics, goods in transit if parts are delivered to customers, and valuable papers and records for customers' and vendors' information.

Backup copies of all records, including computer records, should be made and stored off premises.

Crime exposure is high for both employee dishonesty and theft of money and securities. Background checks should be conducted on all employees. The inventory must be under the supervision of more than one individual so that there are checks and balances. All ordering, billing and disbursements must be handled as separate duties. Regular audits must be conducted.

Money should be regularly stripped from the cash drawers and placed in a safe away from the front door. Irregular drops should be made to the bank to prevent a substantial accumulation of cash on the premises.

Commercial Insurance And Business Industry Classification

  • SIC CODE: 7532 Top, Body, And Upholstery Repair Shops And Paint Shops, 7533 Automotive Exhaust System Repair Shops, 7534 Tire Retreading And Repair Shops, 7536 Automotive Glass Replacement Shops, 7537 Automotive Transmission Repair Shops, 7538 General Automotive Repair Shops, 7539 Automotive Repair Shops, Not Elsewhere Classified
  • NAICS CODE: 811111 General Automotive Repair, 811112 Automotive Exhaust System Repair, 811113 Automotive Transmission Repair, 811118 Other Automotive Mechanical and Electrical Repair and Maintenance, 811121 Automotive Body, Paint and Interior Repair and Maintenance, 811122 Automotive Glass Replacement Shops, 811198 All Other Automotive Repair and Maintenance
  • Suggested ISO General Liability Code(s): 10072, 10073, 10075
  • Suggested Workers Compensation Code(s): 8380, 8393, 9516

Description for 7532: Top, Body, And Upholstery Repair Shops And Paint Shops

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops

7532 Top, Body, And Upholstery Repair Shops And Paint Shops: Establishments primarily engaged in the repair of automotive tops, bodies, and interiors, or automotive painting and refinishing. Also included in this industry are establishments primarily engaged in customizing automobiles, trucks, and vans except on a factory basis. Establishments primarily engaged in customizing automobiles, trucks, and vans on a factory basis are classified in Manufacturing, Industry Group 371.

  • Antique and classic automobile restoration
  • Automotive body shops
  • Automotive interior shops
  • Automotive paint shops
  • Automotive tops (canvas or plastic), installation, repair, or sales and
  • Automotive trim shops
  • Bump shops (automotive repair)
  • Collision shops, automotive
  • Customizing automobiles, trucks or vans: except on a factory basis
  • Upholstery repair, automotive
  • Van conversions, except on a factory basis

Description for 7533: Automotive Exhaust System Repair Shops

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops

7533 Automotive Exhaust System Repair Shops: Establishments primarily engaged in the installation, repair, or sale and installation of automotive exhaust systems. The sale of mufflers, tail pipes, and catalytic converters is considered to be incidental to the installation of these products.

  • Catalytic converters, automotive: installation, repair, or sales and
  • Exhaust system services, automotive
  • Mufflers, automotive: installation, repair, or sales and installation

Description for 7534: Tire Retreading And Repair Shops

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops

7534 Tire Retreading And Repair Shops: Establishments primarily engaged in repairing and retreading automotive tires. Establishments classified here may either retread customers' tires or retread tires for sale or exchange to the user or the trade.

  • Rebuilding and retreading tires for the trade
  • Retreading tires
  • Tire recapping
  • Tire repair shops
  • Tire studding and restudding
  • Vulcanizing tires and tubes

Description for 7536: Automotive Glass Replacement Shops

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops

7536 Automotive Glass Replacement Shops: Establishments primarily engaged in the installation, repair, or sales and installation of automotive glass. The sale of the glass is considered incidental to the replacement.

  • Glass replacement and repair, automotive

Description for 7537: Automotive Transmission Repair Shops

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops

7537 Automotive Transmission Repair Shops: Establishments primarily engaged in the installation, repair, or sales and installation of automotive transmissions. The sale of transmissions and related parts is considered incidental to the installation or repair of these products.

  • Automatic transmission repair, automotive
  • Transmission repair, automotive
  • Transmission, automotive: installation, repair, or sale and installation

Description for 7538: General Automotive Repair Shops

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops

7538 General Automotive Repair Shops: Establishments primarily engaged in general automotive repair. Establishments primarily engaged in industrial truck repair are classified in Industry 7699.

  • Automotive repair shops, general
  • Diesel engine repair, automotive
  • Engine repair, automotive
  • Engine repair, truck: except industrial
  • Garages, general automotive repair and service
  • Motor repair, automotive
  • Truck engine repair, except industrial

Description for 7539: Automotive Repair Shops, Not Elsewhere Classified

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 753: Automotive Repair Shops

7539 Automotive Repair Shops, Not Elsewhere Classified: Establishments primarily engaged in specialized automotive repair, not elsewhere classified, such as fuel service (carburetor repair), brake relining, front-end and wheel alignment, and radiator repair. Establishments primarily engaged in automotive welding are classified in Industry 7692.

  • Air-conditioner repair, automotive
  • Automotive springs, rebuilding and repair
  • Axle straightening, automotive
  • Brake linings, sale and installation
  • Brake repairing, automotive
  • Carburetor repair
  • Electrical service, automotive (battery and ignition repair)
  • Frame repair shops, automotive
  • Front end repair, automotive
  • Fuel system conversion, automotive
  • Fuel system repair, automotive
  • Generator and starter repair, automotive
  • Radiator repair shops, automotive
  • Wheel alignment, automotive

Auto Garage Insurance - The Bottom Line

To protect your operation, employees and customers, having the right auto garage insurance coverage is vital. To see the options are available to you, how much coverage you should invest in and the cost - speak to a reputable commercial insurance broker.

Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.

Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Workers Compensation InsuranceWhat is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Liquor Liability InsuranceWhat is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).


Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law
Small Business Commercial Insurance

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.

Additional Resources For Auto Service & Repair Insurance

Read useful small business auto service and repair insurance policy information. In an aotu related business, you need to have the right type of commercial insurance coverage so that your garage, employees, and customers vehices & other property is protected.


Auto Service Insurance

There is a Auto Service Risks Program is an enhancement of the Commercial Package Policy that is available to certain Auto Service Operations.

Automobile repair shops and garages offer a wide variety of mechanical services, from engine repair to tune-ups. The operation may be stand-alone or be part of another business such as an automobile dealership or filling station.

Gasoline stations are normally limited to the dispensing of gasoline, kerosene, diesel or fuel oil with incidental sales of auto accessories and pre-packaged snack food items. Larger gasoline stations may offer other services, such as auto repair, retail sales of food or auto parts, snack bar or restaurant, propane tank exchange, towing, or baths and overnight lodging facilities for truckers.

Car washes provide facilities for cleaning automobiles and other motor vehicles. Some are drive-through with either partially or fully automated conveyance of the vehicle throughout the operation. Hand washing, waxing, or interior cleaning of the vehicle may be offered, with customers sent to a waiting area. Damage to the customers' vehicles is the primary exposure as machinery and washes can break antennas, pull off stripping, crack glass and damage tires.

The three basic types of risks that are contemplated by the Auto Service Risks Program include:

  • Repair Shops - operations primarily engaged in auto repair. This includes shops that do body, fender, radiator, ignition service and paint work.
  • Service Stations- operations primarily engaged in servicing autos. The sale and installation of auto accessories are a part of this category as long as major engine or bodywork is not performed. Car wash facilities are eligible.
  • Storage garages and other parking places.

The following classifications are specifically listed as eligible: Automobile:

  • Quick Lubrication Services
  • Repair or Service Shops
  • Repair Shops–Self Service
  • Rustproofing
  • Storage
    • Car Washes–self-service and full-service
    • Convenience Food/Gasoline Stores–self-service, full-service and combined
    • Gasoline Stations–self-service, full-service and combined
    • Parking–public-open air and not open air

Automobile, motor home, mobile home, trailer, and motorcycle dealers are NOT eligible for this program.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Environmental Impairment, Underground Storage Tank Liability, Umbrella, Hired and Non-owned Auto & Workers Compensation.

Other commercial insurance policies to consider: Earthquake, Flood, Computer Fraud, Forgery, Goods in Transit, Cyber Liability, Employment-related Practices, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.


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