Garagekeepers Coverage: Direct Primary vs Legal Liability

As an auto repair shop owner, understanding the difference between legal liability and direct primary garage keeper’s coverage while discussing coverages with your agent is important for the protection of your clients, your own business, and your reputation.

Garagekeepers coverage is what protects the vehicles you are working on, but ensuring you have the correct garage keepers coverage will save you from surprises and headaches when an accident does occur.

Legal liability garagekeepers coverage only covers a loss when a tech or mechanic is legally liable for a loss. For example, if a mechanic forgets to set a parking brake on a car, and the car rolls into a toolbox, the mechanic is legally liable for this loss, therefore the coverage will come into play and pay out. The downside to this coverage is exposed when there is a loss that a shop is not legally liable for. For example, a car is being worked on overnight, the mechanic locks the car and parks it inside of the garage, and a thief breaks into the shop at night, damaging the car in the process. Because the mechanic did everything to protect the vehicle, they are not legally liable for the loss; therefore the vehicle owner’s insurance will have to pay for the claim or the shop will have to front the cost of the damage in order to protect their rapport with their clients.

Direct primary coverage, on the other hand, will be the first and primary coverage that pays out a claim; regardless of fault or the party that damaged the vehicle. Direct primary coverage allows for a shop owner to take responsibility for a loss, regardless of who caused it.

As a body shop or auto repair shop, customers are trusting that their vehicles will be kept safe and protected; but accidents do happen. It’s important to provide your business, as well as your clients, the most broad protection and peace of mind that their vehicle will be in safe keeping.

To ensure your shop has the proper coverage in place, give us a call at 480-813-3415 to speak to one of our commercial insurance professionals, or click the “Get a Quote” tab to have one of representatives reach out to you.