Manon Frappier

Garage Insurance—How to Protect Your Clients’ Vehicles

Given the nature of your business (garage, repair shop, towing service, used car dealership, car wash, service station), you may be liable for the vehicles in your care. Does your insurance cover all risks that may be associated with your operations? Learn about the best coverage for garages!

Your Garage? You’re Liable!

Did you know that it is your responsibility to insure clients’ vehicles in your custody, care, and control? Garage owners generally become responsible for a client’s vehicle as soon as it enters their area of operation. For this reason, it is strongly recommended that the maximum amount per vehicle and the value of all vehicles belonging to your clients on your premises be properly calculated. You can never be too safe because a collision during a test drive or vandalism of multiple vehicles can happen at any time. It is also important to notify your broker if you work on other types of vehicles and vessels, such as boats, motorcycles, and RVs, to avoid any ambiguity during the settlement of a claim.

Protect Yourself and Your Employees

In addition to insuring the vehicles of your clients, it is important to protect yourself, by insuring your property and that of your employees, including the tools you use on a daily basis. Your tools may be covered in the contents section of your insurance policy, but they may also be insured specifically, especially if they have considerable value. Since replacing tools can be very costly during a claim, it is important to have an adequate limit to avoid unpleasant surprises. Here’s an additional tip: if your employees bring their personal tool boxes to your garage, you need to notify your broker once again to avoid any issues in the event of a claim.

Loss of Income Coverage: Is It Worth It?

If a major claim were to prevent you from continuing your normal business operations, would you be able to absorb the losses related to this work stoppage? Loss of income coverage would be indispensable, because it would compensate you while your facilities were being rebuilt.

Tanks and Risk of Pollution

Were your tanks taken into account in your insurance policy? If a fire occurs and your facilities become a total loss, your tanks will very likely no longer be compliant. If you need to replace them—and if they were not included in your policy—you will need to cover the costs for replacing this loss.

Pollution liability insurance is important to consider, especially given the nature of your operations. For example, if your waste oil tank leaks, your liability with regard to pollution may be covered by this insurance. However, note that the event must generally be discovered 120 hours after it began, and you have an additional 120 hours to notify your insurer, which can thus be very restrictive. In addition, this basic coverage does not include fines and penalties from government bodies. There are other types of coverage that are more suitable for this kind of risk. Ask your broker for more information.

For service station owners, have you also thought about your canopy, i.e. the part above your gas pumps that protects them from bad weather? The value of the canopy must be included in the total value of your building (garage), in the event of a claim.

To conclude, the best way to adequately insure your garage is to properly assess all potential risks. Fortunately, your Lareau broker is an expert in risk management and will suggest the most appropriate coverage for your business, whether it as a garage, repair shop, towing service, used car dealership, car wash, or service station. Contact us!

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