Mechanic Shop Insurance
Mechanic shops work with customer vehicles, specialized tools, automotive lifts, replacement parts, and potentially hazardous materials every day. An accident, fire, theft, employee injury, or damaged customer vehicle could create significant expenses and disrupt normal business operations.
Mechanic shop insurance can help protect an automotive business against certain risks involving liability, employees, buildings, equipment, and vehicles left in its care. Coverage can be tailored to the shop’s operations, whether it is an independent repair garage or a larger facility with multiple technicians and service bays.
Who May Need Mechanic Shop Insurance?
Insurance options may be available for a variety of automotive service businesses, including:
- General automotive repair shops
- Transmission repair shops
- Brake and muffler shops
- Tire sales and service centers
- Oil change and lubrication businesses
- Auto electrical repair shops
- Mobile mechanics
- Diesel and truck repair facilities
- Auto body and collision repair shops
The appropriate coverage may depend on the services provided, number of employees, annual revenue, building ownership, equipment values, test-driving practices, and the number and value of customer vehicles kept at the shop.
Common Mechanic Shop Insurance Coverages
Garage Liability Insurance
Garage liability insurance may help protect a mechanic shop against certain third-party bodily injury or property damage claims arising from its business operations. For example, a customer could be injured inside the shop, or completed repair work could allegedly contribute to property damage or an accident.
The coverage provided depends on the policy’s terms, limits, exclusions, and the circumstances surrounding the claim.
Garagekeepers Insurance
Customer vehicles may be damaged by fire, theft, vandalism, severe weather, or a collision while stored, serviced, or test-driven. Garagekeepers insurance may help cover certain physical damage to customers’ vehicles while they are in the shop’s care, custody, or control.
Garagekeepers coverage is different from garage liability insurance, and a mechanic shop may need both forms of protection.
Commercial Property Insurance
Commercial property insurance may help protect a shop’s building and business property against certain covered losses. Depending on the policy, covered property may include diagnostic equipment, lifts, tools, computers, office furnishings, inventory, and replacement parts.
Business income coverage may also be available to help with certain lost income and continuing expenses if a covered event temporarily closes the shop.
Workers’ Compensation Insurance
Automotive technicians may be exposed to burns, cuts, strains, falling objects, vehicle accidents, and injuries involving lifts or power tools. Workers’ compensation insurance may provide medical and wage-replacement benefits to qualifying employees who suffer work-related injuries or illnesses. Requirements vary by state.
Commercial Auto Insurance
A mechanic shop may own tow trucks, service vehicles, parts-delivery vehicles, or other business-use automobiles. Commercial auto insurance may provide liability and physical damage coverage for qualifying business-owned vehicles.
Commercial Umbrella or Excess Liability Insurance
Commercial umbrella or excess liability insurance may provide additional limits above certain underlying liability policies. This coverage may be appropriate for shops seeking added protection against potentially costly claims.
Mechanic Shop Insurance FAQs
How much does mechanic shop insurance cost?
Costs vary based on services, revenue, payroll, claims history, property values, equipment, coverage limits, and the number and value of customer vehicles handled.
Does mechanic shop insurance cover customer vehicles?
Garagekeepers insurance may cover certain damage to customer vehicles while they are in the business’s care, custody, or control. Coverage depends on the policy and cause of loss.
Are a mechanic’s tools automatically covered?
Not necessarily. Tools may require commercial property, inland marine, or other specialized coverage. Shop owners should verify which tools are insured, where coverage applies, and what limits and deductibles are included.
Does an insurance policy cover every accident or loss?
No. Policies contain conditions, exclusions, deductibles, and coverage limits. Business owners should review their policies carefully and discuss their services and risks with an insurance professional.
