Suppose your client is an auto dealer with a large lot of cars for sale. While rearranging cars on the lot, one of your employees accidentally crashes one car into another. Is this damage covered?
Auto businesses have unique risks and, therefore, need specific insurance coverage and protection. Should your clients’ auto businesses have a Commercial General Liability (CGL) policy or Garage Liability Insurance policy? Let’s compare the two.
Commercial General Liability (CGL) is a common, comprehensive business insurance policy that insures businesses against property damage or bodily injury claims resulting from their actions to others. This policy can help cover claims including:
- Bodily injury caused by your business
- Medical costs for customers injured by your business
- Property damage, including damage caused by fire, lightening or explosion
- Reputational harm if someone sues you for libelous or slanderous statements
- Advertising issues, such as a lawsuit claiming an ad contained misleading or erroneous information
Garage Liability is a specialized type of insurance policy designed specifically for businesses within the automotive industry, including auto dealers, parking garages, parking lots, vehicle customization shops, repair shops, and more. Garage Liability protects your business from bodily injury and property damage resulting from business operations.
While not all Garage Insurance policies offer the same amount of coverage, most cover:
- Bodily injury
- Liability claims, such as discrimination
- Employee dishonesty
- Property damage caused by business-owned equipment
- Products manufactured or sold by your business that result in damage to a customer’s vehicle
When determining if your client needs CGL or Garage Liability coverage, consider whether there’s auto exposure to the risk.
A garage policy is beneficial for auto businesses because it provides an all-in-one approach to cover their premises, products, and autos. Unlike a CGL policy, it can also include a variety of physical damage coverages around autos for personal, service, or commercial use, including:
- The care, custody, and control of non-owned autos
- Physical damage coverage for dealers’ autos
Additional coverages can be added to the Garage Coverage form, including:
- Uninsured/underinsured motorist
- Personal injury protection
- Broadened coverage
To determine whether your clients’ businesses are eligible for Garage Liability, please consult this chart as a general guide:
| Eligible for Garage Form: | Ineligible for Garage Form: |
|---|---|
| Towing service with impound lot | Towing service without impound lot |
| Valet parking lot | Self-parking lot |
| Full-service car wash | Self-service car wash |
| Transmission, windshield, radiator, brake repair on autos | Tire, part, carburetor, upholstery sales without installation |
| Heavy truck sales | Tire manufacturing |
| Auto dealer | Parts manufacturing |
| Auto window tinting on autos | Mobile home repair |
| Trailer customizing | Drive away contractor |
| Auto storage | Auto rental operation |
| Auto auction | Lessor’s risk only |
| Auto body painting | Rental dwellings |
| Paintless dent removal | Contractors’ equipment rental |
| Tow truck assembly | Watercraft sales |
| Trailer hitch installation | Salvage yard – 100% part sales |
| Quick lubes | Auto dismantling with part sales only |
Jencap’s specialized garage brokers understand the unique intricacies of the insurance coverages required to properly protect an auto business. For more information, contact us.
