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General liability insurance for auto services and dealers

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General liability insurance

General liability insurance covers common business risks like customer injury, customer property damage, and advertising injury. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.

General liability covers common risks

From gas stations to repair shops, automotive businesses face a high risk of customer injuries and property damage. A visitor could slip on the floor of a repair shop, or a mechanic could accidentally damage a customer’s car while moving it.

General liability insurance for garages, a type of garage liability insurance, can help pay for an injured customer’s medical bills or the cost of repairing a damaged vehicle, plus expenses from a related lawsuit.

This policy provides liability coverage related to:

  • Customer injuries
  • Customer property damage
  • Advertising injuries, such as slander

Bundle policies to save money and increase security

Small automotive businesses may be able to bundle general liability insurance with commercial property insurance in a business owner’s policy (BOP). A BOP usually costs less than purchasing each policy separately. Businesses that are eligible for a BOP typically:

  • Have fewer than 100 employees
  • Have a small office or shop
  • Make less than $1 million in annual revenue
  • Operate in a low-risk industry
  • Need less than 12 months of business interruption insurance

Talk to a licensed Insureon agent who specializes in the auto service industry to find out if a BOP fits your business.

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What coverage can general liability provide for auto service companies?

Customer injuries

If a customer or delivery person slips and falls at your car wash or gas station, there’s a chance you could be blamed for the injury. If the person decides to sue, you could end up paying for medical expenses – plus the cost of hiring a lawyer. General liability insurance can cover:

  • Medical bills
  • Attorney’s fees
  • Court-ordered judgments
  • Funeral expenses in fatal incidents

However, this policy does not cover employee injuries. For that, you’ll need to carry workers’ compensation insurance.

Customer property damage

General liability insurance provides coverage when a customer’s vehicle or other property is damaged. For example, if a car wash malfunctions and breaks a side mirror off a customer's car, your general liability policy could help pay for damages. This policy can also cover legal expenses if a customer sues to recoup costs.

Advertising injuries

While creating an advertising campaign for your garage or shop, it’s possible to inadvertently copy a logo or slogan you saw elsewhere. Accidental advertising injuries are covered by general liability insurance, including:

  • Defamation, both libel (written) and slander (spoken)
  • Copyright infringement

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Other important policies for auto service businesses

While general liability insurance covers the risks that are most likely to affect your business, it does not provide complete protection. Employee injuries or damage to business property can occur at any small business. Other insurance policies for automotive professionals to consider include:

Workers’ compensation insurance: Required in almost every state for auto service businesses that have employees, workers’ comp can cover medical expenses for work-related injuries and illnesses.

Business owner’s policy: This policy combines general liability insurance and commercial property insurance, usually at a lower rate than if the policies were purchased separately.

Commercial auto insurance: This policy covers vehicles owned by your automotive business. It typically pays for accidents, vehicle theft, vandalism, and weather damage.

Garage keepers insurance: This policy offers financial protection for business operations that service and store vehicles regularly. It covers your business in the event that a customer’s vehicle is damaged or stolen while in your care.

Get free quotes and compare policies with Insureon

Are you ready to safeguard your auto service business or dealership with general liability insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.

Updated: June 21, 2022
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