Auto Repair Shop and Mechanic Insurance

When working with customers and their vehicles, there are two types of coverage that protect against special risks your car and auto repair business will likely face:

• Garage liability insurance, a type of general liability insurance, extends coverage to the additional exposure of garage operations. For example, it would cover a lawsuit from a customer who slipped and fell at your mechanic's garage.
• Garage keepers insurance protects against accidental physical damage to a vehicle in your care, custody, or control, such as a customer’s car damaged by an employee in the repair bay or parking lot, or during a test drive.

Garage keepers coverage and garage liability insurance cover different risks in the auto shop industry, and you may need both policies to financially protect your business.

Mechanic shops should consider the following insurance products, which cover other risks you might encounter:

• Product liability insurance protects against legal costs related to defective products, such as a faulty seal or air filter. It's often included with your general liability insurance.
• Errors and omissions insurance (E&O), also called professional liability insurance, pays for lawsuits related to professional mistakes and oversights, such as a customer who sues you because the repair service took longer than promised.
• Business interruption insurance is often included in a business owner's policy (BOP), which covers lost income and other costs when your shop is forced to close temporarily due to a fire, storm, or other covered property claim. This policy is also known as business income insurance.
• Equipment breakdown coverage can be added as an endorsement to your commercial property insurance or BOP. This type of insurance covers expenses when your auto repair equipment or machinery suffers a malfunction or mechanical failure.
• Business personal property (BPP) insurance offers financial protection against lost, damaged, or stolen business property. BPP is often included as part of your commercial property insurance and helps cover the important business items you need to run your business if they need to be replaced.
• Tools and equipment insurance is a type of inland marine insurance that helps pay for the repair costs or replacement of tools and equipment (like a car jack, impact wrench, or air compressor) if they're lost, stolen, or damaged. The items typically must be less than five years old and valued under $10,000. This policy doesn't cover general wear and tear on the equipment.
• Commercial crime insurance, also referred to as fidelity insurance, financially protects your business from criminal acts committed by employees against customers or clients, such as an employee stealing from a customer or client. Your policy would reimburse the client for the amount that was stolen. One type of commercial crime coverage is surety bonds, which some clients may require before working with you.
• Employment practices liability insurance (EPLI) safeguards your business if you're sued by an employee over wrongful termination or another violation of employee rights. EPLI can also be added as an endorsement to a general liability or business owner's policy.

It's easy to find cheap auto repair shop insurance that matches your unique business needs and budget. One way is to review coverage options from different insurance carriers, and with Insureon's easy online application you're able to get free quotes from several insurance companies.

There are a few other ways car repair business owners can save, such as:

• Bundle policies. The most popular option is a business owner's policy, which pairs your general liability insurance policy with property insurance to save money.
• Customize coverage. You can choose lower limits, a higher deductible, or certain exclusions to save on your premium.
• Focus on safety. Fewer accidents mean fewer liability claims, which helps lower your insurance costs.

Learn more about how to find cheap business insurance for small businesses.