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What is Garage Liability? How is it different than general liability? Who should have garage liability? These are all great questions that you may ask yourself throughout your career as a business owner. Garage liability is very similar to general liability but is customized to protect a certain industry. That industry would be, but not limited to, auto repair shops, auto body shops, and new & used car dealerships. These 3 industries are the most common industries to need garage liability. With that said, other industries may qualify for garage liability insurance.

Now to dig deeper within the garage liability spectrum, there are two divisions that garage liability consists of. Those divisions are called Division 1 and Division 2.

Division 1 garage liability is meant for those business owners that own and/or use dealer plates or transfer plates. In simple terms, Division 1 garage liability covers owned, non-owned, and hired autos. Examples of businesses that may need this type of insurance would commonly be auto dealerships and, in some circumstances, auto repair and auto body shops. Auto repair and auto body shops may qaulify for Division 1 garage liability insurance if their business entity owns 1 or more vehicles or uses dealer plates for any reason.

Division 2 garage liability is meant for those business owners that do not use dealer plates but may or may not own a vehicle. For instance, most auto repair shops can be covered under a division 2 garage liability policy because, although they may own a vehicle, they would only need coverage for hired and non-owned auto coverage, which is what division 2 garage liability insurance covers. If an auto repair shop or auto body shop does not use dealer plates or transport plates but does own a vehicle, then it would most likely make the most sense to write a commercial auto policy separate from the garage liability policy.

Garage liability, like general liability, will cover, not only auto liability from hired and non-owned autos, but also owned autos, law suits, damage to others property, and many other situations that a business owner may be found negligent for.


Please contact Eric Trabert at Jacob Insurance Service for additional information or if you have any questions regarding your garage liability policies.  

Information is provided for your convenience and does not constitute professional advice. If you have additional insurance questions, please contact our agents for a personal meeting.

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