When I first started digging into small business insurance, I assumed a general liability policy would cover all my needs. It turns out that’s not always true. General liability is important, but it doesn’t protect everything, such as customer property left in your care.
For auto shops, that gap can be a huge problem. If a customer’s vehicle is damaged overnight in your lot, you’re still on the hook. Garage keepers primary coverage helps pay for damage to customer cars in your custody, so you don’t have to wonder who pays when the unexpected happens.
And just as I learned that I needed more specialized coverage in my own work, many auto businesses may need garage keepers insurance to fully protect themselves.
What This Endorsement Is
Garage keepers primary coverage is an endorsement you can add to a current Business Owner’s Policy (BOP) or general liability policy. It helps protect customer cars when they’re in your care, custody, or control, even if it’s only for a few hours. If a car is damaged by fire, theft, vandalism, or an employee accident, your insurance steps in to help cover it.
A garage keepers primary policy is meant for any business that takes temporary custody of customer vehicles, including:
- Auto dealerships
- Auto detailers and customization shops
- Auto repair and service shops
- Body and paint shops
- Parking lots, storage lots, and valet services (coverage may depend on the policy)
- Tire and lube shops
- Tow truck operators
Without this endorsement, those vehicles fall outside the protection of your general liability or property insurance. This policy add-on is a way to strengthen the protection you already have by making sure customer cars are included in your overall business coverage.
Why It Matters
It only takes one incident to realize why garage keepers coverage can be so important. Imagine there’s a fire in your shop that damages several vehicles waiting for service or a vandal goes around breaking windows and spray painting cars in your lot overnight.
Even smaller problems, such as an employee accidentally damaging a customer’s car during a test drive, can lead to significant repair costs and stressful conversations with upset customers.
Without garage keepers coverage, you’d be left paying out of pocket or pushing the claim to your customer’s personal auto policy. Neither option is great. Repair bills can add up, but you also need to worry about reputational costs and damage.
Customers trust you with their vehicles, and if something goes wrong, they expect you to make it right. Garage keepers primary coverage helps you protect your bottom line without jeopardizing the relationships your business relies on.
What’s Covered vs. What’s Not
Garage keepers primary coverage is designed to protect customer vehicles in your care. But as with any insurance policy, it’s important to understand what’s covered and what isn’t, so you’re not left with any surprises.
Here’s a quick breakdown:
Covered:
- Theft of a customer’s vehicle or parts while on your property
- Vandalism, like keyed cars or broken windows
- Fire that damages one or more customer vehicles in your shop or lot
- Accidental damage caused by your employees, such as a collision, dropped tools, or mishandling
Not Covered:
- Vehicles owned by you or your employees
- Normal wear and tear or mechanical breakdowns unrelated to a covered incident
- Natural disasters, such as a flood or earthquake (unless specifically added to your policy)
Knowing what falls within and outside your policy can help you determine when you can file a claim.
Cost and Value
Even a single damaged vehicle can cost your business time and money. One theft, fire, or accident could wipe out weeks of profit. Adding garage keepers primary coverage is often a far more affordable option than paying out of pocket for a minor incident or repair.
Beyond the numbers, peace of mind matters. When you and your employees leave for the night, you’ll know your customers’ vehicles have extra protection, and if the unexpected happens, the coverage will help you fix any damage while safeguarding your reputation and limiting the impact on your customers’ insurance premiums.
How to Add It
Garage keepers primary coverage is something you can add to your existing business owner’s policy, commercial auto, or general liability policy coverage. It’s not a brand new policy.
To get this endorsement, speak with your current broker or insurer about your operations, the number of vehicles you typically have on-site, and any special conditions or risks your business may have.
From there, your insurer should be able to tailor coverage to your business. With expert guidance, adding garage keepers coverage is a straightforward and easy process. Plus, you can feel confident you’ll have the added protection you need to keep growing your business.
Protect Your Business and Your Customers
If your business takes care of customer vehicles, garage keepers primary coverage helps protect against some of the most common risks, such as fire, theft, vandalism, or accidental damage. Just one incident can strain your finances and break customer trust, but the right coverage can help keep both secure.
If you haven’t reviewed your policy recently, consider contacting an insurance expert and comparing quotes to determine if this coverage fits your needs.