What is Garage Liability Insurance?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 04 September 2019
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Garage liability insurance is a type of liability coverage that is purchased by businesses that operate some type of auto service center. Garages, general repair shops, body repair shops, tire service centers and automobile dealers that offer auto repair services often carry this type of coverage. While garage liability insurance is often confused with garage keepers’ insurance, the two policies provide protection in different situations.

The scope of coverage that is offered with a garage liability insurance plan will typically focus on protecting the insured party in the event that a customer encounters difficulties as the result of the installation of faulty parts. Policy terms and provisions may also cover issues that are caused by the processes used by a service technician in servicing a customer’s vehicle. This type of coverage makes it possible to reimburse the customer for any out of pocket expenses created by the faulty repair job, while also making sure the shop owner is not placed in financial jeopardy as the result of the incident.

In many cases, garage liability insurance will also cover incidents that have to do with the general operation of the repair shop or service center. For example, if an employee should file a discrimination suit, the liability coverage would protect the interests of the owner. Many policies of this type would also protect the shop owner from discrimination claims leveled by individuals who applied for work at the business, but were ultimately not hired.


At the same time, garage liability insurance offers liability protection in the event that a customer sustains some type of injury while his or her vehicle is being serviced. This means if a customer were to fall and sustain an injury while on the premises, the liability coverage would aid in offsetting any expenses that would result from a lawsuit or settlement with that customer. Often, the policy would cover medical expenses as well as any other compensation awarded by a judge should the matter escalate to a lawsuit and be heard by the court having jurisdiction in the area.

There is sometimes confusion between garage liability insurance and a type of liability coverage known as garage keeper’s insurance. Garage keeper’s insurance focuses on providing protection in the event that a customer’s vehicle is damaged while on the premises of the insured party. This means that if the repair shop is burglarized and a customer’s car is stolen or damaged, the keeper’s insurance coverage will pay claims related to that action. By contrast, garage liability insurance does not usually provide this particular type of protection.


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