Auto Repair Shop Insurance

Auto Repair Shop Insurance: Everything You Need to Know

Auto repair shops offer many mechanical services, including engine repairs and additional tune-ups for different models of vehicles. In some cases, this unique business is a stand-alone service such as an auto mechanic, and in other situations, it is a part of a bigger car dealership or some other organization. 

Because of the risky nature of auto repair shop business and the fact they specialize in many different types of repairs, from transmissions or brakes, or servicing a variety of motorized vehicles, a single accident in the shop can result in a lawsuit that damages the financial health of the business. Because of this, it might be a good idea to consider auto repair shop insurance. Here’s everything you need to know about this type of policy before you make a final decision. 

Auto Service Repair Insurance 1

What Is Auto Repair Shop Insurance?

Automotive repair shop insurance, also known as automotive garage insurance, protects your business against a variety of liabilities that auto repair shop owners often face. 

These liabilities can result from unexpected accidents such as customer injuries, employee illness and property damage. Adequate insurance coverage can cover your business and protect you from the financial risks associated with lawsuits and claims. 

Types of Auto Repair Shop Insurance

There are a few basic types of insurance policies for auto repair shops, including:

  • Garage Liability: This type of policy protects auto repair shops from liabilities like damages caused by faulty work and customer slips and falls. Garage liability doesn’t cover your building or mechanic tools, so if you need coverage for these types of assets, you should think about purchasing property and equipment insurance.
  • Garagekeepers Legal Liability: This type of coverage is useful if you are found responsible for the physical damage of a customer’s vehicle while you are repairing it.
  • Commercial Auto: Commercial auto insurance can be helpful when it comes to covering your business if you are a mobile mechanic or you use different vehicles for your business. 
  • Workers’ Compensation: This type of coverage protects you in case your employees are injured or ill while working for you. 
  • General Liability: Usually, mobile mechanics don’t have a repair shop, but they still need basic liability protection in case they cause bodily injury or property damage while working.

Property and Equipment Insurance

Property and equipment insurance is a special type of insurance policy that can protect your auto repair shop. Property and equipment insurance covers your auto repair business in case there is a power surge, mechanical breakdown, or if an employee of yours causes the equipment to stop working properly. 


Usually, insurance companies offer various coverage options for auto repair shops to fit their specific needs. These additional coverage options include: 

  • Equipment and portable tools coverage 
  • Employment practices liability insurance
  • Insurance that allows you continue your business

What Risks do Automotive Repair Shops Face?

Auto repair shops work directly with their customers’ valued assets. Because of that, they face many risks, including: 

  • Vehicle Damage: In case an employee of yours damages a car while repairing it or someone breaks into it, the customer can sue you for the property damages. This is where vehicle damage comes in useful.
  • Mechanic Errors: As a mechanic, you might overlook a safety issue that causes a vehicle accident. In this case, your business can be found responsible for the damages and you may get sued.
  • Employee Injuries: When working with the same tools on many different vehicles, your employees are making a lot of repetitive motions that can lead to a carpal tunnel. Carpal tunnel is often considered a work-related injury, which means you could get sued by your employees. 
  • Cyber Attacks: When it comes to cyber breaches, hackers attack big and small businesses. Because auto repair and maintenance shops store client information, including names, addresses, email, and payment methods, on their systems, their computers could get attacked as well. This is another common risk in which auto repair shop insurance would be a good idea.

What is the Difference Between Garage Liability and Garage Keepers Insurance? 

In short, the difference between garage liability coverage and garage keepers insurance coverage is the same as the difference between liability insurance and physical damage insurance. Garage liability coverage protects the insured’s liability for operations and autos, and garage keepers insurance covers damage to customers’ vehicles. 

Insurance companies that offer garage insurance usually have the ability to endorse the auto repair shop policy additionally so it includes coverage that can also be found in general liability. This is especially useful for business owners in the automotive industry because it allows them to get their basic exposures covered through one single policy. 

How Much Does Auto Repair Shop Insurance Cost?

Auto repair business insurance costs depend on a number of factors, including location, size of their business, sales, payroll, and experience. 

General Liability Insurance Cost

General liability insurance is considered a good option for automotive repair shops because it protects against bodily injuries and property damages that happen as a result of their operations. There are several factors that impact the price of general liability policy, including the location of your business. Another important factor is your level of interaction with others because the more you deal with clients in person the more risk you face on a daily basis. Usually, general liability policies for auto repair shops start around $600 a year for small businesses.

Garage Keepers Insurance Cost 

Garagekeepers typically start around $800 per year for auto repair shops but can easily surpass $2500 for bigger businesses. It can be difficult to figure out the exact price as it depends on your business and the coverage you need. In particular, it usually depends on the number of vehicles you typically attend to in a day.

Property Insurance Cost

Auto repair shops depend on many types of equipment that help them get the job done. Because they are an investment, equipment and tools are never cheap. So when something gets damaged or stolen, it can seriously affect your earnings. 

The price of property insurance for an auto repair shop can start around $1000 annually but it usually depends on where you’re located, what you want covered, and how much your property is worth.

Do I Need Auto Repair Shop Insurance?

If your repair shop has a physical location, such as a garage, parking lot, or just a storage area, you probably want to consider protecting your valuable assets with auto repair shop insurance. If you are still unsure about whether you need this coverage, here are the types of businesses that often benefit the most from this insurance policy:

  • Automotive repair shops
  • Body shops
  • Muffler and transmission shops
  • Car dealerships
  • Battery and repair shops

Did you like this article? If you did, you will probably want to read more about how to protect your commercial property as well