Garagekeepers liability

How does garagekeepers coverage work for a repair shop or tow yard?

Customers leave trucks with you. A truck being repaired, a car stored after a tow, a trailer parked in your yard: all of it is property you're responsible for while you have it. If a vehicle is damaged by fire, theft, vandalism, hail, or another covered cause, or damaged by your staff, the owner looks to you.

Garagekeepers liability is the policy that generally responds, up to its limit, less your deductible. It sits between several other coverages, and each has its own role:

• Vehicles in your care at the shop or yard: garagekeepers.
• Vehicles on your hook while you tow: on-hook towing.
• Liability for injuries or damage to others on your premises: general liability.
• Your building and contents: commercial property.
• Your own tow trucks and service trucks: physical damage.

Two common forms. Garagekeepers coverage is generally written one of two ways, and policy wording varies:

Which form fits depends on your customers' expectations, your contracts, and how you want claims handled. Ask your insurance agent to explain the wording in plain terms.

What does garagekeepers liability cover, and what doesn't it?

Policies vary. Read your declarations, definitions, and exclusions. In general:

Often covered

• Damage to customers' vehicles in your care, custody, or control at your premises, as the policy defines it
• Covered causes of loss, such as fire, theft, vandalism, collision, and weather, depending on the form
• Legal defense for covered claims, under many policies

Often not covered, or covered only with conditions

• Vehicles while on your hook or in transit. That is on-hook towing.
• Poor workmanship or faulty repairs. The cost of redoing the work is commonly excluded.
• Contents and personal property in a customer's vehicle
• Pre-existing damage
• Your own vehicles and equipment. That is physical damage.
• Theft where keys were left in the vehicle, or where required security conditions were not met, under many policies
• Vehicles outside the locations listed on the policy
• Injuries to people. That is general liability or workers' compensation.

These are common patterns, not universal ones.

What affects the cost of garagekeepers coverage?

We don't publish prices. Cost is set by insurers and the licensed agents you work with. The factors that generally move it:

• Limit. The most the policy pays for one vehicle and in total at one location
• The highest-value vehicle you hold at once and the total in your care
• Form. Legal liability or direct coverage
• Causes of loss covered
• Type of work. Repair, body work, tire shop, storage, or tow yard
• Deductible
• Security. Fencing, lighting, cameras, and key control
• Location. Where the shop or yard is
• Claims history and experience

Who typically needs garagekeepers coverage?

• Towing and repair: The main audience. Repair shops, body shops, tow yards, and storage lots.
• Small fleets: A fleet with its own shop works on its own trucks, which are not customer vehicles. If you also work on others' trucks, ask your insurance agent about it.
• OTR and local haul: Mostly not a direct fit. It may come up if you repair for other operators on the side.
• New authority: Only if you add a shop or yard to your business.

Heavy-duty customers' vehicles carry high values, so the limit you set should reflect the largest unit you hold, not an average.