CGL vs. Garage Liability Insurance: Which is Right for Your Client?

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:

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:

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.

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