Owners of garages and auto repair shops in South Carolina are not only entrusted with fixing their customers’ cars, but are also entrusted with keeping those cars safe while in their control.

Garage liability insurance and garagekeepers liability insurance are designed to help you protect your customers’ property and your business in the event that accidents, injuries, or property damage occur.

But these are two separate and distinct types of insurance; most garage owners will need both to avoid any gaps in coverage. To find appropriate garagekeepers liability insurance and other types of South Carolina business insurance, talk to a South Carolina independent insurance agent.

What Is Garagekeepers Liability Insurance?

Garagekeepers liability insurance in South Carolina is a specialty business insurance product designed for auto repair shops as well as service stations, auto body shops, detail shops, vehicle electrical and repair shops, auto glass installers, oil change and lube shops, emissions testing sites, and just about any other type of establishment that provides parts or service for vehicles and temporarily stores those vehicles onsite.

Garagekeepers liability insurance is a type of “bailee’s coverage” that protects you if a customer’s vehicle is damaged due to your negligence while it is in your care, custody, or control. This protection is not included in the standard garage liability policy, which covers bodily injury and property damage claims on the garage premises.

What Does Garagekeepers Liability Insurance Cover in South Carolina?

There are 418,000 small businesses in South Carolina. Last year, nearly $6 billion in commercial insurance claims were paid.

It’s hard for any type of small business to absorb property losses or the costs related to lawsuits, and that’s where your business insurance comes in. If you operate some type of automotive shop or garage, you probably know that you have to protect your business with different types of property and liability insurance.

General liability insurance protects you from the costs of property damage or injuries that occur on your premises. But your general liability insurance does not cover damage to your customers’ cars while they’re on your premises.

There are a number of ways in which a customer’s vehicle can be damaged while in your possession, such as fire, theft, weather events, vandalism, employee test drives, and lift accidents—to name a few. If a fire swept through your garage, how would you pay for the losses to other people’s property that’s in your care? This is a serious gap in coverage if you don’t have garagekeepers liability insurance.

Garagekeepers liability insurance in South Carolina insurance protects you if a customer’s vehicle is damaged while it is in your care, custody, or control. You need this coverage to protect customers' vehicles from occurrences such as fire, theft, bad weather, or vandalism at your place of business.

Garagekeepers liability insurance covers damage to a customer's vehicle while it is left in your care and while you are servicing, repairing, parking, or storing it. It functions similarly to auto physical damage coverage, except it offers third-party coverage (coverage for vehicles that are not owned by your business).

What Doesn't Garagekeepers Liability Insurance Cover in South Carolina?

The contents of a customer’s vehicle are not covered under a garagekeepers liability policy in South Carolina. This policy only covers vehicles, not personal property inside the vehicles. Garage owners can add endorsements for coverage of customers’ personal property that is in their care.

Garagekeepers liability insurance in South Carolina also does not cover damage that occurs as a result of faulty workmanship, parts, or insufficient warrantees.

If you purchase a garagekeepers liability policy in South Carolina, it is also likely to contain a variety of standard coverage exclusions, including:

What Is the Difference between Garagekeepers Liability Insurance and Garage Liability Insurance?

You may think that garagekeepers liability insurance and garage liability insurance are interchangeable terms, but they are not. And it’s important to understand the differences if you own any kind of garage operation.

Garage liability insurance in South Carolina provides coverage for the day-to-day operations of businesses in the automotive industry, supplementing the coverage offered by a general liability policy. It covers bodily injury and property damage that results from garage operations. This includes injuries that occur at the shop, e.g., customer slips and falls. In addition, it covers other liability claims such as discrimination and employee dishonesty.

Garage liability insurance also covers liability claims associated with automobiles owned by the business, but it does not cover customers' cars that are left in the care of the shop. Garage liability insurance can also cover products manufactured or sold by the shop that cause damage to a customer’s vehicle.

Garagekeepers liability insurance is a separate policy that covers property damage to a customer’s car while it is in your care, custody, or control. This can include damage during road test drives, while storing the vehicle during non-working hours, vandalism of a customer’s car, theft of a customer’s car, and more.

Most automotive businesses will need both types of policies in order to avoid any gaps in coverage.

What Is Direct Primary Garagekeepers Liability Insurance?

Garagekeepers liability policies in South Carolina pay for damage based on whether or not you purchase legal liability coverage or direct coverage.

• Legal liability coverage: Covers damage to a customer’s vehicle due to negligence that you are legally liable for (e.g., if a mechanic damaged the vehicle while making repairs or during a test drive).
• Direct primary coverage: Covers damage to the customer’s vehicle regardless of who is at fault. Direct primary coverage means that your insurance will pay first dollar on the covered loss.  
• Direct excess coverage: Covers damage to the customer’s vehicle regardless of fault. Coverage kicks in when your customer has no applicable insurance coverage or when the limits of the customer’s policy are not high enough to cover the loss.

Direct primary garagekeepers liability insurance in South Carolina is more expensive, but it may keep your customer relationship intact after a damage incident by helping the customer avoid having to file a personal auto insurance claim.

What Are the Limits of a Typical Garagekeepers Liability Policy in South Carolina?

Garagekeepers liability insurance limits in South Carolina are difficult to determine. First, a multi-location business must select a limit for each location. And each location’s policy limits are determined in part by the volume of their business.

Many automotive businesses determine their policy limits by considering the average value of the vehicles in their care and the average number of vehicles in their care at any given time.

If the average value of the vehicles in your care is around $30,000, and you typically have 10 customer vehicles on hand at any given time, you might select a garagekeepers liability policy limit of $300,000.  

Because garagekeepers coverage is physical damage coverage, deductibles apply to covered losses. Depending on the cause of the loss and the type of coverage that you have, deductibles may apply to each auto damaged in an incident, and the policy limit would be the maximum limit for all of the autos damaged at the location in a single incident

How Can a South Carolina Independent Insurance Agent Help?

Insuring an automotive business or any type of garage can be complex. You need specialized overage designed for your type of business. South Carolina insurance agents can make sure your auto repair shop or garage has appropriate insurance coverage, including garagekeepers liability insurance. Your agent will help you assess your risks and find the best policies for your needs.