Most of the value on your lot belongs to a floorplan lender, and some of it belongs to customers.

Garage liability

The liability form written for dealers, covering operations and the vehicles you sell.

Without it — A standard general liability policy is not written for this trade.

Garagekeepers

Damage to CUSTOMERS’ vehicles in your care for service, storage or appraisal.

Without it — General liability excludes property in your care, custody or control.

Dealers open lot

Your own inventory against hail, theft, vandalism, flood and fire.

Without it — A single hailstorm can damage every unit on the lot at once.

Drive-away and demonstration

Test drives, dealer plates and vehicles moved between locations.

Without it — A customer crashing on a test drive is your liability, not theirs.

Finance and insurance E&O

Claims over F&I products, disclosure, title and contract errors.

Without it — The finance office is a regulated sales process and it generates claims.

Employment practices

Claims by sales and service staff.

Without it — Commission disputes and turnover make this a frequent claim in the trade.

What is the difference between garage liability and garagekeepers?

Garage liability covers your OPERATIONS — injury and damage arising from running the dealership, including the vehicles you sell. Garagekeepers covers CUSTOMERS’ vehicles while they are in your care, which garage liability specifically excludes. A dealership with a service department needs both, and the second one comes in different forms: legal liability pays only when you were at fault, while direct primary or direct excess pay regardless. The cheaper form is the one that leaves you arguing with a customer about whether the hail on their car was your fault.

The three garagekeepers forms

How should the open lot limit be set?

Against your PEAK inventory value, not your average, and reviewed as the lot fills. The loss that decides this is hail: it damages every unit simultaneously, so the exposure is the whole lot rather than one car. Check the deductible structure too — open lot policies commonly carry a per-unit deductible with an aggregate cap, and a per-unit deductible applied across ninety damaged vehicles is a very different number from one deductible.

Does the floorplan lender have requirements?

Yes, and they are usually specific and non-negotiable. Floorplan financiers require physical damage cover on financed inventory at stated limits, with themselves named as loss payee, and evidence maintained continuously. A lapse is typically an event of default under the floorplan agreement, which is a much faster problem than an uninsured loss. Send us the floorplan terms rather than a summary; the wording is what the lender checks.

What about test drives and dealer plates?

Both are covered under the garage policy and both need describing accurately. Unaccompanied test drives, extended overnight demos and vehicles loaned to customers during service each rate differently, and some policies restrict unaccompanied drives or require a license check. It is worth having a written test-drive procedure with license verification — it reduces claims and it reads well at renewal.