Garage Keepers Insurance: Protection for Auto Service Businesses

There is a specific insurance policy called "Garagekeepers Legal Liability" that can protect against potential damages to automobiles caused by things like fire, theft, collision, or vandalism. Owners of companies that run gas stations or offer towing services are vitally protected by this insurance. It provides protection when a customer's vehicle is parked, kept, or receiving maintenance in a specific, covered location.

Fascinatingly, Garagekeeper's Legal Liability insurance adopts distinct names in Texas and Virginia to comply with local laws. In Virginia, it is referred to as "Garagekeepers Legal Liability insurance," but in Texas, it is known as "Storage Location insurance." Additionally, only in these two states does the Garagekeepers Legal Liability insurance policy—commonly referred to as On-Hook Towing insurance elsewhere—include insurance protection for towing services.

Who need legal liability insurance for garage owners?

Garagekeepers Legal Liability insurance is crucial whether your company tows automobiles or runs a gas station since it protects you when parking clients' cars. This policy is specially created to protect your business in such circumstances.

Limitations, deductibles, and other information

The scope of coverage offered by the Garagekeepers Legal Liability policy is directly tied to the limitations you choose for each incident. Whether it involves damage to a single vehicle or a whole fleet of cars entrusted to your care, the maximum coverage amount is determined by the limits you select. While the available options may differ based on your state, it is common to have a maximum limit of $2,500 per incident. Moreover, as part of the policy, you will need to specify a per-vehicle deductible, typically set at $500. This means that you will assume responsibility for the initial $500 of the repair or replacement cost for each vehicle, while the remaining amount will be covered by your insurance provider.

Example of garagekeepers’ legal liability insurance

During the late hours of the night, you receive a distress call to tow a vehicle that has broken down. With the mechanic's garage closed for the day, you decide to store the vehicle there overnight. Unfortunately, unauthorized individuals gain access to your garage and cause damage to the customer's vehicle. In this unfortunate scenario, the garage keeper's legal liability insurance will provide coverage for the costs associated with repairing the damage inflicted on the customer's vehicle. The extent of coverage will be determined by the level of insurance you have chosen.

Exclusions and limitations

When managing multiple storage facilities, it is important to individually identify, verify, and insure each facility to ensure proper coverage. To adequately protect your business, it is essential to obtain not only garage keepers legal liability coverage but also liability insurance and on-hook towing insurance. These additional insurance policies complement the garage keepers legal liability coverage, offering comprehensive protection for your business operations. Each insurance policy serves a specific purpose in safeguarding your business against potential risks and liabilities.