Towing companies and automotive service stations have a lot of insurance options to think about. From premises liability to workers compensation and even tool coverage, there are several moving parts to keep a business like this properly insured.
There is one facet of insurance for these businesses that is often overlooked because it is considered “optional”: Garagekeepers Liability. It can and should be an important part of your insurance portfolio.
What Is Garagekeepers Liability?
Garagekeepers Liability insurance is liability insurance that protects a customer’s vehicle when you are keeping it at an insured location for parking or storing or to perform service. This means the vehicle is under your care, custody, and control, and that if it is damaged, your business would be responsible.
Care, Custody And/Or Control
Why is care, custody, and control important? Because in the Garage Coverage Form (CA 00 05) anything under your care, custody, and control is excluded:
But I Have Garage Legal Liability…
Garage Liability and Garagekeepers Liability are not the same coverage. In terms of auto insurance, think of it this way: Garage Liability is like having liability coverage only on your vehicle. If you get into an accident the other person’s vehicle is covered by your insurance, but yours isn’t. Garagekeepers Liability is like having “full coverage” insurance for your vehicle.
For example: A customer brings his vehicle in for service. Your employee does the work and then takes the vehicle out for a test drive. The mechanic is involved in an auto accident. The customer’s vehicle is totaled, as is the vehicle of the other driver.
Garage liability would pay for personal injury and property damage to the other driver and his/her vehicle. There would be no coverage for the customer’s vehicle since it was in the care, custody, and control of the garage. (Hopefully, you have Workers Compensation coverage for your mechanic!)
If the service station has Garagekeepers Liability insurance, there would be coverage for the vehicle that was being repaired. Garagekeepers Legal Liability (sample form here) would eliminate the worry about the care, custody and control exclusion.
As noted in paragraph b., this coverage not only includes accidents but also fire, lightning, explosion, theft, and vandalism of customer vehicles or property.
Garagekeepers Liability coverage, like auto insurance coverage, is customizable. You may choose the limits, the deductible, and a number of other factors depending on your business.
Call Hayes Brokers today to find out more about this valuable coverage.