Your general liability policy excludes the cars on your lot.

Garagekeepers

Customer vehicles in your care, custody and control — the exposure every repair shop and dealership has and most standard policies exclude.

Without it — Customers’ vehicles on your lot and in your bays. General liability excludes property in your care, custody and control, so this is the coverage the whole risk turns on.

General liability

Third-party bodily injury and property damage — the line nearly every contract names by default.

Without it — A customer slips in the waiting area, and — under completed operations — a repair that fails on the road months after the invoice was paid.

Commercial auto

Vehicles the business owns and the people who drive them for work.

Without it — Shop trucks, the parts runner and road tests. An employee test-driving a customer’s car is operating a non-owned vehicle on your business.

Workers compensation

Required in almost every state the moment you have employees. Priced on payroll and class code, which is why the class code is worth arguing about.

Without it — Lifts, presses, solvents and hot work. Technician injuries are severity claims, and the class rates reflect it.

Commercial property

Buildings and contents, valued at what it costs to rebuild today rather than what you paid.

Without it — The building, the lifts, the alignment rack and the diagnostic equipment the shop cannot open without.

Contractors pollution liability

Bodily injury, property damage and clean-up caused by a pollutant your work released — chemical drift, run-off, fuel spills. The standard general liability form excludes all of it.

Without it — Waste oil, solvents, refrigerant and the tank under the yard. The pollution exclusion on a GL policy reaches all of it.

Equipment breakdown & spoilage

Covers the walk-in, the compressor and the line when they fail from the inside — a mechanical or electrical breakdown is excluded by property policies, and the stock that thawed goes with it.

Without it — A compressor or lift failure stops the shop, and the property policy treats mechanical breakdown as excluded.

Employment practices liability

Wrongful termination, discrimination and harassment claims brought by your own employees. General liability specifically excludes these.

Without it — Wage and hour claims are the common ones in shops paying flat rate.

Why will my general liability not cover a customer’s car?

Because of the care, custody and control exclusion, and it is deliberate rather than an oversight. General liability covers damage you cause to property that belongs to other people and is NOT in your keeping. The moment a car is handed over for work it is in your keeping, so the exclusion applies to precisely the property you are surrounded by all day. That is what garagekeepers exists to cover, and it is why a shop with a million in general liability can still be uninsured for the twelve cars parked outside overnight.

Legal liability or direct primary — which do I want?

Direct primary, in almost every case. Legal liability pays only where the damage was your fault, so an overnight theft or a fire with no negligence on your part may not respond at all. Direct primary pays regardless of fault, which is what your customer assumes you have and what every dispute turns on. It costs more. Explaining to a customer that their car burned in your building and you are not paying is a worse outcome than the premium difference.

Are test drives covered?

Not automatically, and this is the one shops get wrong. When your technician road-tests a customer’s vehicle, they are operating a non-owned auto in the course of your business — the customer’s personal policy is not there to answer for your employee’s driving, and your commercial auto policy needs hired and non-owned coverage for it to respond. Shops that hand keys to a lot attendant or a valet service have the same exposure with more people involved.

What about the cars I store for customers who never come back?

They are still in your care, and they are still your exposure — often for years. Abandoned vehicles accumulate in almost every shop, they sit outside, and a hailstorm does not distinguish between a car booked in yesterday and one abandoned in 2019. Tell your broker how many are on the lot, because a garagekeepers limit set for the working bays will not respond to the whole yard, and mechanics liens take time to clear.

Does it matter that I do bodywork rather than mechanical?

Yes, on two fronts. Bodywork brings paint, which means a spray booth, solvent storage and a fire load that changes the property rate and the underwriter’s appetite. It also brings overspray, which is property damage to vehicles and buildings nobody was working on. Mechanical shops carry more of their severity in the workers comp class and in completed operations — a wheel or brake job that fails is a different claim from a paint job that runs.