Garage Liability Insurance vs. General Liability: What’s the Difference?

If you run a business that is focused on autos — like an auto dealer, repair shop, dealership, or body shop — you might think that a general liability policy is all that you need to cover your exposures and risks.  But here’s the catch: general liability won’t fully protect you when vehicles are involved in your business operations. That’s where garage liability insurance and garage keepers insurance comes in.

What Is Garage Liability Insurance?

Think of garage liability insurance as a specialized form of general liability insurance designed for businesses that deal with customer vehicles. Similar to general liability insurance, It covers things like:

• Bodily injury or property damage caused by business operations (for example, if a customer slips in your shop)

• Legal defense costs if your business is sued over an accident or negligence

• Incidents involving customers or third parties while they’re on your premises

But here’s the key thing: it does not cover damage to customer vehicles while in your care (for example, if one of your mechanics accidentally scratches a car while working on it). That’s what garage keepers insurance is for—which is often bundled alongside garage liability.

Venn Diagram of Difference between Garage Liability and General Liability

What Is Garage Keepers Insurance?

Garage Keepers coverage is for claims involving a customer's vehicle while it is in your possession and it covers accidental damage, theft, vandalism, or even fire. Some businesses that should consider adding Garage Keepers insurance to their Garage policy include:

• Auto body shops & repair shops

• Car dealerships

• Towing companies

• Parking Lots

• Tire Dealers

• Businesses that take possession of someone's vehicle on consignment (such as an auctioneer)

Final Thoughts

If your business interacts with customer vehicles, garage liability insurance is an essential piece of coverage to protect yourself from lawsuits and unexpected incidents. Pair it with garage keepers insurance for full protection over the vehicles in your care.

Want help figuring out the right policy for your business? Let’s talk!