Garage Keepers vs. Garage Liability: Key Differences

garage liability

According to the Bureau of Transportation Statistics, there were 275,924,442 registered vehicles in the United States in 2020. This figure does not include motorcycles, all-terrain vehicles, buses, or trucks. With all of these vehicles on the road, some of them break down every day due to collisions, poor maintenance, or age. When that happens, most drivers are not skilled enough to handle their own repairs, so they send their cars to a garage.

If you offer excess & surplus insurance to garage owners, your clients probably ask about different kinds of insurance and how they can protect their property and avoid liability issues with customers. Read on to get the answers to key questions such as, “What is the difference between garage liability and garage keepers liability?”

Issues That Each Policy Covers

The biggest difference between garage liability insurance and garage keepers liability insurance is what these two plans help with. Garage liability insurance protects your clients from liability issues related to their business procedures. For example, if an employee installs the wrong part into a customer’s car or deviates from a contract, garage liability insurance can prevent these errors from ruining your client’s budget.

What is garage keepers liability insurance? While this policy also helps with garage-associated costs, it protects your clients’ customers’ property, not your clients’ businesses. For example, if someone breaks into your client’s garage overnight and steals a car, his or her garage keepers liability insurance helps with legal costs or car replacement bills. This kind of policy pairs well with excess & surplus insurance for maximum coverage, and it works similarly to collision or comprehensive policies for standard car insurance.

Explain to your clients that there are three subtypes of garage keepers liability insurance. The first is direct excess insurance, which helps with repairs if a customer has already exceeded his or her deductible. Direct primary policies help replace or repair customers’ cars during break-ins and severe weather events, such as tornadoes and hurricanes. Finally, legal liability steps in if your clients’ employees further damage a vehicle in their care, necessitating repairs for which the client cannot be charged. 

Scope of the Coverage

Garage liability insurance can help your clients handle costs associated with running their mechanic shops. On the other hand, garage keepers liability insurance only steps in if a customer’s car is damaged or stolen, not the customer’s personal belongings. If a customer leaves a bunch of CDs or a backpack in his or her car and someone steals them, your client is not liable and this type of insurance does not apply. To avoid confrontations with customers, your clients should ask their customers to take out all personal items before leaving their keys and cars at the garage.

Cochrane & Company

For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.


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