Running an auto repair shop can be a rewarding and profitable venture. However, it also comes with its fair share of risks. One of the most important aspects of protecting your business is having the right insurance coverage, and that includes garage keepers insurance. In this article, we will explore what garage keepers insurance is, why it is crucial for your auto repair business, and how you can obtain it.
What is Garage Keepers Insurance?
Garage keepers insurance is a type of coverage specifically designed for auto repair businesses. It provides protection for the vehicles that are left in your care, custody, and control while you are performing repairs or storing them. This insurance not only covers damages to the vehicles caused by accidents, fire, theft, or vandalism but also protects against liability claims arising from these incidents.
Why is Garage Keepers Insurance Important?
As an auto repair shop owner, you are responsible for the vehicles entrusted to your care. Accidents can happen, and if a customer’s car gets damaged while it is in your possession, you could be held liable for the repairs. Without garage keepers insurance, you would have to bear the financial burden of these damages, which can be significant and potentially bankrupt your business.
Types of Garage Keepers Insurance Coverage
Garage keepers insurance typically offers three types of coverage:
1. Legal Liability Coverage
This coverage protects you when you are legally liable for damages to a customer’s vehicle. For example, if one of your employees causes an accident while test driving a customer’s car, and it results in damage to the vehicle, legal liability coverage would cover the cost of repairs.
2. Direct Primary Coverage
Direct primary coverage goes beyond legal liability and provides coverage for damages to a customer’s vehicle regardless of who is at fault. This type of coverage is more comprehensive but comes with higher premiums.
3. Direct Excess Coverage
Direct excess coverage is similar to direct primary coverage but only kicks in after the customer’s own insurance has been exhausted. It provides additional protection for your business without duplicating coverage already provided by the customer’s insurance.
How to Obtain Garage Keepers Insurance
Obtaining garage keepers insurance is relatively straightforward. You can start by contacting insurance providers that specialize in commercial auto coverage or those who cater specifically to auto repair businesses. It is essential to provide accurate information about your business, including the number of vehicles you handle, their value, and your annual revenue, as these factors will affect your premium rates. Compare quotes from different insurers to find the best coverage at a reasonable price.
Frequently Asked Questions (FAQs)
1. Do I need garage keepers insurance if I have a general liability policy?
While a general liability policy provides coverage for certain risks, it does not typically include protection for damages to customer vehicles in your care. Garage keepers insurance is specifically designed for this purpose and is highly recommended for auto repair businesses.
2. How much does garage keepers insurance cost?
The cost of garage keepers insurance can vary depending on several factors, such as the size of your business, the number and value of vehicles you handle, and your claims history. It is best to request quotes from multiple insurance providers to get an accurate idea of the cost.
3. Can I add additional coverage to my garage keepers insurance policy?
Yes, you can often customize your garage keepers insurance policy to include additional coverage options that suit your business needs. Examples of additional coverage include fire and theft protection, employee dishonesty coverage, and business interruption coverage.
4. Is garage keepers insurance required by law?
The requirement for garage keepers insurance can vary depending on the state or country in which your business operates. However, even if it is not legally mandated, having this insurance is highly recommended to protect your business and provide peace of mind to your customers.
5. Can I transfer my garage keepers insurance if I move my business location?
When you move your business to a new location, you will need to update your insurance policy to reflect the change. Your current insurer may be able to transfer the policy to the new location, or you may need to find a new insurance provider that can offer coverage in the new area.