Does Garage Liability Include General Liability Insurance?

Service businesses in the auto industry generally carry garage liability insurance to cover certain risks of loss. Insurers provide this coverage to meet the specific needs of companies such as tow truck companies, repair shops, oil change facilities and body shops. Garage liability policies typically feature a number of different coverages, including general liability coverage.

Garage liability policies include general liability coverage. Because garage-centered businesses deal with the general public, they have a certain risk of damages occurring to others as a result of the garage's customer traffic. General liability insurance protects the garage from claims and lawsuits brought because of events such as customer injuries.

Garage liability policies are usually not as broad as standard commercial general liability policies. A garage owner wanting more comprehensive liability covering claims from consumption of liquor on the premises or ads making false statements against competitors can buy endorsements to add that coverage. Endorsements can also add coverage for liability stemming from the policyholder's negligence in causing a fire that leads to damage to neighboring businesses.

Much of a garage owner's liability stems from its employees' use of motor vehicles owned by the garage. The automobile liability part of a garage liability policy covers damages caused by the employees' negligent operations of motor vehicles. For example, if a tow truck driver negligently strikes another vehicle while on a run, the garage liability policy would cover the other innocent driver's damages. The auto coverage can even cover negligence by customers. For example, if an automobile dealer lets a customer test-drive a vehicle, and the customer causes an accident, the garage policy would typically cover the other driver's damages.

A garage liability policy may not provide adequate protection for all garage businesses because it does not protect customers' vehicles that may be damaged while in the custody of the garage. A garage owner can purchase garagekeepers legal liability insurance to cover these situations. This insurance covers damages to customer vehicles that are being parked, repaired, stored or even towed by the garage owner. When considering how much coverage to buy, garage owners will consider the maximum value of customer vehicles likely to be in their custody at a given time.