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Garage keepers insurance (often referred to as garagekeepers coverage) is a specialty business policy that covers damage to a customer’s vehicle while it is in your care, custody, or control. Unlike standard liability insurance, which covers damage you cause to other people or property, this specific coverage pays to repair or replace a customer’s car if it is damaged while you are servicing, parking, or storing it.
Who Needs Garagekeepers Coverage?
If your business takes custody of a customer’s vehicle, whether to park it, store it, or perform a service, you likely need a Garage Keepers policy to protect your business.
Common businesses that require this protection include:
- Auto Dealers
- Service and Body Shops
- Auto and Mobile Detailers
- Oil Change Facilities
- Auto Glass Repair Shops
- Valet Services
- Towing Companies
If you are searching for affordable garage keepers’ legal liability insurance (GKLL), you’ve come to the right place. Insured ASAP provides the most affordable quotes online or by phone.
Garage Liability vs. Garagekeepers Coverage: What’s the Difference?
Many business owners use the terms “Garage Liability” and “Garagekeepers” interchangeably, but they cover two very different risks. To fully protect your shop, you must understand the difference:
Garage Liability Insurance covers bodily injury or property damage arising from your garage operations. On the other hand, Garagekeepers Coverage covers the physical damage to the customer’s car while it is in your possession.
Understanding How the Coverage Works
Garagekeepers’ liability insurance protects business owners against physical damage losses that occur to customers’ vehicles while in their care, custody, and control. This coverage is comparable in many ways to a Commercial Auto Policy.
When purchasing this insurance, you will typically choose between three levels of protection:
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Legal Liability:
The most common form. It pays for damages only if you (the business) were negligent or at fault.
-
Direct Primary:
Pays for damage to the customer’s vehicle regardless of fault (e.g., hail damage or theft where you weren’t negligent). This is often preferred because it protects your reputation and does not require the customer to file a claim on their personal insurance.
-
Direct Excess:
Pays for damages in excess of what the customer’s personal auto policy pays.
Breaking it Down: Real-World Examples
So now that you know what garage keepers insurance is, let’s look at an example of how it works in practice.
Scenario A: The Towing Company
You run a towing business and are called to tow a broken-down car late at night. The mechanic’s garage where it is set to go is already closed, so you store the car in your secure lot overnight. Unfortunately, criminals break into your lot and vandalize the customer’s car.
The result? A standard liability policy would likely deny this claim. However, Garagekeepers Legal Liability insurance would pay to repair the vandalism damage to the customer’s car, up to the limit you selected.
Scenario B: The Valet Service
You own a popular cafe downtown known for its lack of parking. You decide to offer valet parking to keep customers happy. One night, the valet is moving a customer’s car and accidentally hits the gas instead of the brake, smashing into a wall. The upset customer demands you pay for the repairs.
The result? You only have general liability coverage for the cafe. The insurance company denies the claim because of the “care, custody, or control” exclusion. If you had a Garage Keepers policy, the collision damage would have been covered.
We Are Here to Help
We know it can be confusing to understand which policies you need. If you are taking customers’ cars into your custody, it is critical that you have a Garagekeepers policy, even if you don’t operate a traditional mechanic shop.
If you aren’t sure if you are leaving yourself open to a lawsuit, please give us a call today at (800) 641-7488. We will be happy to discuss the exposures your business may face and help you find the right coverage.
