If you are a business owner of auto body and repair shop, towing service, car dealership,
or auto parts storage garage, then you’ll likely want to consider garage keepers
legal liability coverage. Your customers trust you with their vehicles when performing
repairs, services, or simply parking or storing their vehicles. They expect that
their vehicles will be returned unscathed; unfortunately sometimes things can go
wrong.
When vehicles of others are left in your custody for repairs or other services,
as a bailee, you are entrusted to provide care and safekeeping of these vehicles.
As such, you expose yourself to risks of damage or destruction of these vehicles
should an accident or peril occur. While you may assume that property insurance
or business auto coverage may protect you from any damage that occurs to these vehicles
under your case, chances are there are exclusions to property that is not owned
by you in these policies.
Therefore, in order to be protected for customer’s vehicles you are keeping for
storage, parking, or services, you’ll need to add a garage keepers liability coverage
endorsement.
Deductibles and Limits of Garage Keepers Legal Liability Coverage
Whether you house one vehicle or a garage or parking lot full of vehicles, you’ll
need to select limits for your garage keepers insurance policy. These limits will
determine the coverage amounts available to you per incident, or on a per-occurrence
basis. In addition, you’ll need to choose the amount of deductible on a per-vehicle
basis, which would be the amount you would pay out-of-pocket for a repair or replacement
of a vehicle — before the insurance company picks up.
Certain exclusions and restrictions apply. For instance, if you have more than one
location in which you store vehicles, each location will need its own garage keepers
insurance. You may also need to purchase on-hook towing insurance if you are primarily
providing towing services.
Example:
Let’s say a customer called your towing company because his car broke down. It’s
late at night, and your mechanic has already left for the day. Your tow truck will
bring the broken down vehicle to your shop, where you store the vehicle overnight.
During the night, a criminal breaks into your garage and takes some parts off your
customer’s car. Garage keepers legal liability coverage would pay to replace and
install the missing parts on your customer’s car, up to the limit you selected when
you acquired the policy and after the applicable deductible.
Garage keepers legal liability coverage gives you peace of mind when servicing or
storing customers’ vehicles — and is another component of a sound business insurance
package.
