Garage Liability
Specialized auto liability coverage for businesses that sell, service, repair, store, or park vehicles as their primary operation.
What It Is
Garage Liability is a specialized form of commercial auto and general liability coverage designed for businesses whose primary operations involve vehicles—auto dealerships, repair shops, body shops, service stations, and parking facilities. It is written on the ISO Garage Coverage Form (CA 00 05) and combines auto liability and premises/operations liability into a single coverage.
The garage form covers liability arising from garage operations (similar to CGL coverage) and auto-related liability for vehicles in the care of the business, test drives, dealer plates, and customer loaner vehicles. This eliminates the need for separate CGL and Business Auto policies for qualifying businesses.
Garage liability does not cover physical damage to customers' vehicles in the insured's care—that is handled by Garagekeepers coverage, which is a separate and distinct coverage typically added by endorsement or on its own form.
Why It Matters for Brokers
Brokers placing coverage for any auto-related business must understand the Garage Coverage Form because a standard Business Auto policy and CGL combination will not adequately cover the unique exposures of these operations. The garage form's integration of auto and premises liability simplifies coverage but also creates confusion when claims involve both auto and operations components. Proper placement prevents costly coverage disputes.
Real-World Example
A used car dealership with 150 vehicles in inventory and 8 employees writes a Garage Liability policy with $1M per occurrence. A customer test-driving a $42,000 SUV runs a red light and causes a three-car accident with $680,000 in bodily injury claims. The Garage Liability policy covers the full $680,000 because the test drive is a covered garage operation. A standard Business Auto policy without the garage form would likely not have covered the test drive vehicle properly.
Common Mistakes
- 1Confusing Garage Liability with Garagekeepers coverage—Garage Liability covers third-party claims, while Garagekeepers covers damage to customers' vehicles.
- 2Writing a standard CGL and Business Auto combination for an auto dealership instead of the proper Garage Coverage Form.
- 3Failing to verify that dealer plate vehicles, loaner cars, and test drive vehicles are covered under the garage form's auto liability section.
How brokerageaudit.com Handles This
brokerageaudit.com's Submission Intake identifies auto-related business classifications (SIC/NAICS codes for dealerships, repair shops, etc.) and automatically recommends the Garage Coverage Form instead of standard CGL and auto. The Policy Checker verifies that Garagekeepers coverage is attached when customer vehicles are in the insured's care.