Insurance for Auto Repair Shops

Automobile repair shops can offer a wide variety of mechanical services, from engine repair to tune-ups. They may specialize in a specific type of repair, such as transmissions or brakes. Normally, auto repair shops do not specialize in body work or painting operations, but they will perform those necessary but incidental to other repairs. Other operations may include the retail sales of automobile accessories and tools. Some repair shops are a part of a gasoline or diesel fuel sales operation, or part of an automobile dealership.

Additional services can include towing, auto club affiliations, pickup and delivery of customers and the loan or rental of replacement vehicles. Some auto repair services will have a mobile unit to perform repairs to stranded vehicles or at the customer’s location.

Recommended Insurance Programs for Automotive Service

The most common form of business insurance for an auto repair shop is a garage keepers coverage. A garage keepers policy may include other lines of liability and property coverage within the form, much like a BOP or commercial package policy.

Coverages Recommended for Auto Repair Shops:

✓ General Liability Insurance
✓ Garage Keepers Liability
✓ Business Personal Property
✓ Hired and Non-Owned Auto
✓ Workers Compensation Insurance
✓ Business Income with Extra Expense
✓ Commercial Crime Coverage

Other coverages to consider for Auto Service and Repair:
Forgery, Computer Fraud, Signs, Employment Related Practices, Business Income, Money and Securities, Accounts Receivable, Computers, Goods In Transit, Valuable Papers and Records, Employee Benefits, Environmental Impairment and Umbrella.

Common Insurance Risks Associated with Auto Repair

General liability (premises liability) exposure comes from slips and falls due to public access to the premises. There is also the attractive nuisance of cars in the parking lots. Customer waiting areas should be provided and customers should not be permitted in the garage area. Floor coverings should be in good condition and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked.

Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the premises are open after dark, adequate lighting and appropriate security for the area must be present. Chains should be in place to prevent entrance after hours.

Products liability exposure can be high due to the potential for an accident in the event that the vehicle is not properly repaired. We recommend that auto repair shops incorporate check-off procedures to verify vehicles are properly serviced.

This type of exposure comes from the physical damage or losses to customers’ vehicles while in the repair shop’s care, custody and control. Your physical lot should be well lit and preventive measures should be in place to prevent vehicle theft. Fences and other security measures may also be appropriate.

Property exposure comes from flammables such as lubricants, oils, degreasers, and solvents, used in the repair operations. They should be properly labeled, stored and separated. Aerosols and flammable additives contribute to the overall fire load. Theft may be a concern because the items sold are considered to be target items. Appropriate security controls using alarms, lighting and access to the premises should be considered.

Welding is often a part of the operation and needs to be evaluated for proper handling of the tanks and gases, as well as adequate separation from the other operations with either a separate room or flash/welding curtains. Tires do not catch on fire quickly; however, when they do burn, the fire is difficult to put out and an oily smoke permeates the entire area.

Automobile liability exposures are from errand running to pick up needed supplies. All drivers should have valid licenses and their motor vehicle registrations regularly checked. Towing presents a more serious exposure due to the potential for damaging customers’ vehicles. All tow drivers must be experienced in towing. Vehicles must be regularly checked, in particular, the hoists and tow bars. If there is any rental of vehicles, each should be inspected and reconditioned before it is rented again.

Employee dishonesty can be better controlled through background checks, inventory monitoring, control of the cash register, disciplined controls and division of duties. Theft of money and securities prevention requires controls of monies kept in the cash drawers and regular bank drops.

Workers compensation exposures can be significant for repair shops. Brake turning, welding or other repair work should be handled only with appropriate safety equipment. Lifting of a vehicle by hoists, jacks, and other mechanical means can result in injury should the equipment malfunction. Lifting by non-mechanical means can result in back injury, sprains, strains or hernias.

Garage Insurance and Other Liability Quotes for Auto Repair

General Liability Shop.com offers affordable liability insurance quotes for repair shops and garages throughout the U.S. Many of our Garage Keepers programs include all lines of business insurance similar to a commercial package policy. Contact one of our business insurance Specialists today at 800-900-8657, or start a quote online now.

Automotive Repair Liability Classification Codes

Commercial insurance companies use various liability classification systems in order to classify and rate coverage premiums for auto repair services. Here are the most common business insurance classification for automotive repair:

Business Liability Category:

Automotive Service and Sales

SIC Business Insurance Codes:

• 7533: Automotive Exhaust Repair Shops
• 7538: General Automotive Repair Shops
• 7532: Body, Paint and Upholstery Repair

NAICS Liability Classifications:

• 811111: General Automotive Repair
• 811112: Automotive Exhaust System Repair
• 811113: Automotive Transmission Repair
• 811118: Other Automotive Mechanical and Electrical Repair and Maintenance
• 811121: Automotive Body, Paint and Interior Repair and Maintenance
• 811122: Automotive Glass Replacement Shops
• 811198: All Other Automotive Repair and Maintenance

Business ISO General Liability:

• 10072: Automotive—Quick Lube
• 10073: Auto Sales, Repair and Service
• 10075: Automotive Repair Shop—Self Service

Common Workers Compensation Class Codes:

• 8380: Auto Repair
• 8393: Auto Body Repair or Paint Shop
• 9516: Auto Shop—Radio and Equipment

A garage keepers insurance policy is similar to a BOP for other types of businesses. A typical garage keepers policy includes general liability insurance and commercial auto coverage, including hired and non-owned auto.