One of the top priorities for new auto repair shop owners should be purchasing liability insurance for the business and for the employees. For example, you and your technicians are working automotive magic all day long in the shop, when one of them is hit with a loose bolt while working on an undercarriage. Or perhaps an employee gets into a slight fender bender while test driving a vehicle that’s in for repair. There are a limitless number of small accidents and injuries that could happen in the shop. Auto service and repair shop insurance is the first line of defense to keep your business safe and to ensure these risks are covered.

We’ll talk you through the ins and outs of auto repair shop liability insurance  and give a few pointers to help you research which policies might be right for you.

Step 1: Find a Policy to Fit Your Specific Business

Whether large or small, every auto body shop needs some type of garagekeeper’s insurance or business property insurance, not only to maintain safety standards and be compliant with local regulations, but also to protect your financial investments in all the heavy tools and inventory stored on the site. Generally there are two types of liability insurance to consider:

Garage keeper’s insurance (or garage liability) can cover:

• Costs incurred when a technician makes a mistake and is responsible for damage to the tools or property 
• Costs for repairs of a customer’s vehicle that is damaged under the care of your shop

Business (or commercial) property insurance can cover:

• Assists in repairs or replacement costs when the building, equipment or tools are damaged by natural disasters or accidents like floods or fires.
• Losses incurred by robbery or vandalism
• Employee theft or crime

Business auto insurance:

• Covers any vehicles that your business owns, such as tow trucks or any other transport vehicles you may use for business-related travel
• Nonowned auto insurance, a subset of this category applies to employees who drive their personal vehicles for business purposes. For example, if an employee gets in an accident on the way to or from a business call, this specialty insurance could save a lot of complication. However, if your auto repair shop doesn’t make a lot of business trips elsewhere, this may not be necessary. 

Step 2: Shop Several Different Providers 

To get the best quote, it’s important to shop around many different insurance providers. The amount you will pay largely depends on the size of your business, coverage needs, whether your shop has made any insurance claims before, how many employees you have and what the risks are in your local area. Usually shops that have made liability insurance claims in the past can expect to pay more than one that is claim free.

There are several larger companies that provide insurance policies specifically for garage owners and auto repair shops. Farmer’s, Progressive, and Trusted Choice are just a few large-name brands with a good reputation among auto shop workers.

Step 3: Regularly Review Your Policy

Once you’ve chosen the right policies, be sure to review the coverage thoroughly. You want it to cover as many of your specific needs as possible. Garage keeper’s insurance is specifically designed for the needs of garage and body shop owners, so any mishaps regarding the vehicles, employees and inventory within the shop should be insured. However, as with any insurance policy, it’s always good to read the fine print and know exactly what you’re paying for. 

A regular review of your policy will also encourage you and your employees to be aware of when you can change your coverage and what features you might be able to add as your business grows. 

Conclusion

For a brand new auto repair shop, it may be wise to start small and be conservative when it comes to purchasing insurance coverage, However, garage keeper’s insurance is one of the most important things to invest in if you want your business to grow quickly and safely. New small businesses take on a lot of risk, from a simple slip and fall by an employee or customer, to a major natural disaster. By investing in a comprehensive garage keeper’s insurance plan, you’ll be protecting your hard work and giving your business a much-needed safety net.

Sources

https://www.farmers.com/business/industry/auto-service-repair/

https://www.progressivecommercial.com/business-insurance/professions/garage-insurance/

https://www.trustedchoice.com/n/81/auto-repair-shop-insurance/