What Insurance do Auto Repair Businesses Need?

Auto repair businesses vary widely. They range from solo mechanics in a one-bay garage to large franchised or independent operations with dozens of employees. Some are standalone, while others are part of dealerships, gas stations, and other auto-related firms. Regardless of how they organize, auto repair businesses need the protection that auto repair insurance provides. 

Auto repair businesses of all sizes have risks that require a mix of standard business and industry-specific insurance coverages. This guide to auto repair shop insurance aims to help repair shop owners understand the coverages they need and the protection they provide. 

Some insurance is a legal requirement. The New Jersey Motor Vehicle Commission mandates insurance coverages for auto repair businesses. This excerpt is from its website: 

Full-service license auto body facilities shall maintain insurance coverage for property damage and liability arising from bodily injury, including, but not limited to: eligible garage liability or equivalent commercial general liability insurance in a minimum amount of $300,000 or a letter of credit in the amount of $300,000; garage keepers’ liability insurance in a minimum amount of $50,000 or a letter of credit in the amount of $50,000. Limited full service license applicants and licensees must also comply with these requirements., 

We’ll breakdown the governmental jargon for you. As we do, the concept of insurance is worth noting. It gives identifiable business classes an ingenious way to spread the risks of losses, especially catastrophes, among the class. When everyone pays a little regularly, they all avoid business-crushing uninsured losses.

A Comprehensive NJ Auto Repair Insurance Program will include: 

• Garage Keeper’s Liability: Pays for damage to a customer’s vehicle while in the care, custody, and control of the auto repair shop.
• General Liability: Covers losses related to third-party physical injuries and property damage.
• Commercial Property: Replaces or repairs business property, including owned buildings, tools, and equipment due to fire and other perils. 
• Business Interruption insurance is included with other policies. It covers loss of income due to closure related to a covered property loss.
• Errors & Omissions: Helps to pay claims of a customer’s financial harm resulting from the business’s professional services.
• Commercial Auto: Covers the vehicles your shop owns, borrows or rents.
• Employee Theft and Crime: Protects from losses due to theft, dishonesty, and fraudulent acts committed by a single employee or a group of employees.
• Workers Compensation: Covers the cost of employee-related on-the-job injuries & disease.

The above coverages are what most auto repair shops carry, which includes all the NJ auto repair insurance mandates. There are other policies to consider depending on the nature of the business. 

• Non-owned Auto Policy: Covers the business’s vicarious liability for employees who use their personal vehicles for business purposes. 
• Business Owner’s Policy (BOP): It is a policy that bundles liability, business interruption, and other designated coverages. Usually, this is better suited for smaller shops.
• Specialty Coverages: Like a BOP, special policies combine several coverages into a comprehensive package for sub-categories. Examples include specialty coverage designed for auto repair services specializing in repair of radiators, brakes, transmissions, mufflers, and body shops. 

What Is the Cost of NJ Auto Repair Insurance?

The answer depends on several factors, including location, business size, type, specialty, the number of employees, sales, and claims history. 

Work with our team of professionals who have decades of auto repair insurance experience and who put their expertise to work to find secure comprehensive, affordable coverage for your business. We negotiate with several carriers to make sure you get competitive rates. 

About Dickstein Associates Agency

Dickstein Associates Agency has distinguished itself as a leading provider of personal and business insurance in the tri-state area for over 55 years. We pride ourselves on being advocates for our clients and providing them with quality and affordable coverages. As Trusted Choice™ independent insurance agency, we partner with various national and regional carriers, allowing for flexible and unbiased coverage for each client’s unique circumstances. For more information on how you can leverage all of your insurance to work best for you, and how we can secure the best insurance in the marketplace based on your specific needs and business objectives, contact us today at (800) 862-6662.