A Guide To Insurance For An Auto Repair Shop

  • AS Team
  • Jun 05, 2022
A Guide To Insurance For An Auto Repair Shop title banner

Running an auto repair shop is no easy task. But then again, auto repair shops are a growing industry, and the need to repair a customer’s vehicle will always be there. 


However, there are many things that one needs to take into account to run an auto repair business or an auto repair shop. 


Irrespective of the repair services available at automotive repair shops, the risk of doing business will always be prevalent. And this is exactly what makes the concern of auto repair shop insurance so important!



What Is Auto Repair Shop Insurance


Getting business insurance is even more important for an auto repair shop because a single error in repair service can have an auto repair shop owner in troubled waters.


So what business insurance is for an auto repair shop? Auto repair shop insurance provides insurance coverage to your auto repair business. Using powerful tools and machinery at your auto repair shop can pose many risks for your team and customers. 


But getting business insurance can give you the protection and confidence you need to run your auto repair shop without any qualms. 


The IoT automotive industry  faces unique risks and challenges, such as accidental damage to a customer’s car. Employees can also get injured during repairs at the auto mechanic business since repairing a customer’s car can also be a dangerous job. 


Hence, it’s essential to get the best auto mechanic insurance for your shop. When it comes to insurance for automotive repair shops, there are various insurance policies that you can choose from. 



What Are The Different Types of Insurance For Auto Repair Shops


Are you wondering what kind of insurance coverage does an auto repair shop need? There are various types of business insurance policies that you can choose from as the owner or manager of an auto repair shop. 


Garage Liability Insurance 


The first type of insurance that’s recommended for auto repair shops is garage liability insurance. Sometimes also referred to as general liability insurance or mechanic insurance, it provides accident coverage of third party bodily injury.


It’s also important to be insured against general liability and have shop insurance for your auto shop.


This will cover the medical costs of injuries, court costs, legal fees, and also property replacement or repair in case of an accident. Without the garage liability insurance policy, everything can be costly and take a severe toll on your auto shop’s financial health.  


This will also protect you if your customer slips and falls in your garage. Getting garage insurance from your insurance agent is vital for your business. Try getting the best insurance solutions for your business. 


Garage Keeper’s Insurance 


Next in line is the garage keepers insurance. Garage keeper’s coverage is necessary if you plan on holding customer cars for a long period. 


It offers you protection in case the customer’s vehicle is damaged or lost from your garage (unlike regular office buildings) or premises under garage insurance. Getting garage insurance or garage keepers coverage should be on the top of the list for small businesses in the auto repair industry.


Also Read | How is IoT used in the Insurance Industry?


Business Insurance/Business Owner’s Policy Insurance


Every owner of an automotive repair shop needs a business owner's policy. This is a combination of general liability insurance, commercial property insurance, business property insurance, and business interruption insurance. 


  1. Commercial Property Insurance 


Business property, such as tools, equipment, furniture, and other inventory, is at a greater risk of being damaged, stolen, or destroyed during a disaster or other emergency. If the property is damaged or destroyed, then this policy pays to restore or replace the property.


If you run a business in an office building or retail center, this type of business insurance helps you protect your property. ​


Business property, such as tools, equipment, furniture, and other inventory, is at a greater risk of being damaged, stolen, or destroyed during a disaster or other emergency. 


If the property is damaged or destroyed, then this property insurance policy pays to restore or replace the property.


  1. Business Interruption Insurance


Business interruption insurance is also commonly known as business income insurance. As the name suggests, it helps in covering the damage of lost income, operating expenses, and other costs arising from property damage, for example, if your auto repair shop building is damaged. 


You should also consider getting regular business liability insurance.


Also Read | AI in Insurance


Property and Equipment Insurance


Property and equipment insurance and business property insurance policy are great ways to protect your property and assets. This is additional insurance and coverage for your special equipment in case of property damage or losses from sudden power surges or mechanical breakdowns. 



Cyber Liability Insurance 


As a business owner that caters to customers, your business will be vulnerable to data breaches. This is especially true if you use the internet and other software to record your data and store client information. 


This insurance will protect you from data theft and other losses incurred from breaches. 



Workers Compensation Insurance 


As an auto mechanic, one experiences various risks in providing auto service for customers' vehicles. So, in addition to auto mechanic insurance, one needs to invest in workers' compensation insurance. 


For workers at a business, the worker’s compensation insurance is usually covered under this type of policy. This type of policy covers lost wages, missed wages, medical expenses incurred because of fault work, work-related injuries and ongoing medical care. 


The mechanic insurance cost will also depend on the type of work the mechanics do. For example, a mechanic who works at a shop will have a different rate than the one working as a mobile mechanic. 



How Much Does Insurance Cost


There are many different insurance and coverages available for a small business. This is especially true for an automotive business that deals with auto mechanics who can suffer from work-related injuries and even more severe injuries.


Hence, it's important to get additional coverage that provides necessary protection and allows you to opt-out of difficult, legal situations. 


But if you are on a budget and wondering how much the insurance policies will cost you, the answer is that it depends. 


Whether it’s insurance for commercial property or for a small business, many factors go into preparing a quote for your next insurance.


Factors Affecting The Cost of Your Insurance Plan 


  • The size of your auto shop 

  • The age of your property and how long you have owned it for 

  • The type of repair and mechanic services that you offer

  • The size of your team and the number of employees you have hired 

  • The amount of time you have been in business for 

  • The coverage limits and deductibles that you will choose and decide on


A little research on the different insurance policies that different companies are offering along with their packages is a great way to get started.  



Where Do I Start


Not sure where to start when it comes to purchasing your insurance policy? Here are a few things you can use to start. When deciding and choosing the right insurance plan for your auto repair business, think about the following factors. 


  • The type of insurance you'll purchase

  • The type of coverage you need

  • The amount of coverage you need

  • The length of time you need it to last

  • The amount of money you need to spend on it


But when you buy the right type of insurance for your company, you can reduce your risk significantly and save money in the long run.

Latest Comments