Garage and auto related operations are unique with respect to the exposures they present. The lines between the general liability for the operations side of things, and the automobile liability blur in several areas. The garage policy was developed to provide comprehensive liability coverage to protect both the general liability and automobile liability exposures in one neatly packaged policy and protect from gaps that would otherwise leave this type of operation exposed to potential claims. As a package, the Garage Coverage Form contains premises liability coverage, products liability coverage, automobile liability coverage, and physical damage protection to vehicles. Endorsements are available to broaden and further protect the insured and to make the Garage Coverage Form even more comprehensive as well as specific broadened coverages such as an amended pollution liability endorsement.
Regarding liability coverage: bodily injury and property damage coverage does not apply to a known possible loss prior to the policy inception date. In order to qualify for coverage, an “accident” has to occur in the “coverage territory” and the “bodily injury” and “property damage” must occur during the policy period. Regarding Auto Liability, most common coverages for covered autos are Symbol 21 “any auto” for dealerships, and for all other acceptable operations are designated Symbol 30 – ‘Autos’ left with you for service, repair, storage, or safekeeping.
Garagekeepers coverage is needed to cover loss or damage to customers’ cars. The coverage may be provided on a legal liability basis or without regard to legal liability. It may be offered as direct coverage that is excess over insurance carried by customers or as direct coverage on a primary basis. You would want to specify to your broker which of the two you want quoted.
This coverage is important to any association that offers valet parking or attended parking of any kind. While general liability does provide some coverage, as soon as the vehicle leaves the premises, general liability ceases and if there is no coverage unless garagekeepers is added to your package.
What Type of Business Should Purchase Garage Liability?
The businesses that should purchase this coverage are:
- Gas Stations
- Used Car Dealers
- Auto Repair and Body Shops
- Car Washes
- Parking and Valet Lots
- Mobile Auto Repair or Detailers
- Tire Dealers
- Used Motorcycle, Large Truck, and RV Sales and Service
- Driveaway Contractors
The form provides protection suited to any operation that, for a fee, accepts the care, custody or control of vehicles belonging to third parties. Even if you don’t drive your customer’s vehicle, if it is in your care even for an hour while replacing a windshield or repairing a ding, you would not be properly covered without garagekeepers coverage. It is necessary because both the General Liability policy and the Auto liability policy excludes coverage for automobiles and exposures involving the care, custody and control of another’s property.
Having explained the basics of Garage Liability and Garagekeepers coverage, rates are based on several factors:
- Type of operation
- Number of employees and/or employee payroll
- Territory area
- Acceptable motor vehicle reports on all drivers
- Safety, condition, and security of premises
- Limits requested