Garage Coverage: I’m covered, right?

Author  |  Kelly Kass, Account Administrator

For most trucking companies, their primary business is generating receipts from loads hauled.  However, a growing subset of trucking companies’ revenue is generated from “ancillary businesses” either in the trucking companies’ name or even a separate name.  These “ancillary businesses” might include, but not limited to the following:

• Automotive Dealers
• Service Stations
• Body Repair & Collision Shops
• Detail Shops
• Oil Change & Lubrication
• Sound and Communications Equipment Repair & Installation
• Tune-Up & Emission Testing
• Mobile Auto Repair
• Towing
• Storage

A very common problem popping up with these “ancillary businesses” is that they may not be properly insured. The common misconception is that these businesses would be covered under the General Liability policy that may already be in place.  However, the General Liability policy specifically excludes this type of operation due to an exclusion for “Your Work”, and for vehicles in your care, custody, and control.  These types of claims can lead to catastrophic situations that many companies find out after an uncovered loss situation occurs.  Here are a few examples of common garage coverage claims scenarios:

• You run a service station and a customer has to leave their vehicle in your bay overnight while waiting for parts.  A fire ensues and destroys the station including your customers’ car.  This is not covered under General Liability – it would be covered under Garagekeepers.
• You run a mobile auto repair business that fixes windshields and the vehicle becomes damaged.  In this case, you don’t even “own” a garage, however, you would need a Garagekeepers policy the vehicle is in your care, custody, and control.

The common Garage Policy is composed of two separate, but both equally important coverages:  Garage Liability and Garagekeepers.

Garage Liability covers the liability for the premises and operations as well as products and completed operations involved with running a garage business.  To further explain, completed operations coverage applies in the event of a claim that results from property damage to an auto as a result of work the insured performed on the auto.

The second piece to the Garage policy is the Garagekeepers form.  The Garagekeepers policy covers the insured’s liability for loss to a covered auto left in the insured’s care while the insured is attending, servicing, repairing, parking or storing the auto in the garage operation.  Some common Garagekeepers claim types are:  Accident involving collision, fire, explosion, theft, or vandalism.  A common issue with this coverage is being “under-insured” in the event of a catastrophic situation.  A few things to consider when determining the proper limit:  How many vehicles could you be servicing or storing at one time?  What are the maximum values of these vehicles?

In summary, the “ancillary businesses” noted above that are generally in place for extra revenue can have devastating effects for those companies that are not properly insured.  A proper Garage policy that consists of Garage Liability and Garagekeepers will help protect your business for years to come.

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