The short answer
Auto repair shop insurance protects mechanics, body shops and tire shops against the risks of working on customers' vehicles: damage to a car while it is in your care, accidents on test drives, claims that a repair was done wrong, and injuries in the shop. It also covers the building or your improvements, tools and diagnostic equipment, and income lost while a fire keeps the bays closed. A licensed broker builds it from your services, staff and premises.
- Independent general repair garages and quick lube shops
- Collision and body shops running paint booths
- Tire shops that store customers' seasonal tires
- Mobile mechanics who repair vehicles in customers' driveways
- Specialty shops for performance, diesel, imports or restoration
2 licensed brokers in the network handle this. In Alberta, Canada, a request for auto repair shop insurance can be offered to up to three of them, chosen because they are licensed for this line and place. They are test brokers while we are in demo.
See the brokers → Outside Alberta, Canada you can prepare and save a request today; sending opens place by place. Brokers answer with their own quotes. Broker.insure does not quote, advise or take commission.
01 / What it covers
The parts worth understanding
Garage liability
Liability for injuries and property damage arising from a business that works on vehicles, including a customer who trips in the service area. Shops are often written on a specialised garage policy, so ask how yours is structured.
Customers' vehicles in your care
A car damaged on a hoist, scratched in the lot, stolen overnight or burned in a shop fire. In many programs this is a separate piece from general liability, with its own limit per vehicle and per location.
Test drives and moving vehicles
Staff driving customers' cars on road tests, to a supplier or back to the client. Ask who is covered behind the wheel, whether there are age or licence rules, and how a collision on a road test is handled.
Faulty work
A brake job that fails, a wheel that comes loose, an engine damaged by the wrong fluid. Policies often treat redoing the work differently from the damage and injuries that follow, so ask where that line sits.
Tools, hoists and diagnostic equipment
Hoists, alignment racks, scan tools, compressors and technicians' personal toolboxes. Ask whether employee-owned tools are included and what limit applies to them.
Used oil, fluids and pollution
Used oil, coolant, solvents and filters stored on site can leak, spill or be dumped by a hauler. Many shop policies limit pollution claims, so ask what applies and whether separate environmental cover is worth discussing.
Building and business interruption
The building if you own it, or your improvements if you lease, plus income and ongoing costs while a covered loss closes the bays. Paint booths and spray areas affect how insurers look at fire.
02 / Get ready
Bring this, and expect these questions
Gather
- A list of services: general repair, collision, paint, tires, alignment, diesel or performance work
- The number of bays and hoists, and the most customer vehicles on site at one time
- How many cars sit on the lot overnight, and how the lot and keys are secured
- A staff list with roles, and who is allowed to road test customer vehicles
- An equipment list with rough replacement values, including technician-owned toolboxes
- How used oil, coolant, solvents and parts washers are stored and collected
- Paint booth details and fire protection records if you do refinishing
- The lease or building details, including age, construction and sprinklers
- Past claims, customer complaints about repairs and any vehicles damaged in your care
A broker will ask
- What is the highest-value vehicle you would expect to have in the shop?
- How many customer vehicles stay overnight, and are they inside or in the lot?
- Who road tests vehicles, and is there a written test-drive route or rule?
- Do you do any welding, painting or work on fuel systems?
- How are used oil and solvents stored, and who collects them?
- Do you store customers' tires or vehicles, with or without a fee?
- Do you sell used vehicles, lend courtesy cars or tow?
- Where are customers' keys kept after hours?
Not sure of an answer? Leave it. "Not known yet" is a fine answer, and a broker will help you fill it in.
03 / Build your request
Answer a few questions. Get your own list.
Pick what fits. Your answers shape the list beside them, and they are saved to your request as plain facts a broker can read. "Not sure yet" is always a fine answer.
04 / Three situations
See which one sounds like yours
A two-bay garage after a break-in
Thieves broke into a two-bay independent garage overnight, took the key box and drove off with two customers' vehicles from the lot. One was recovered damaged; the other is still missing, and both owners are asking the shop to pay.
First steps. Get the police report numbers and the work orders for both vehicles, and contact the insurer before promising either customer anything. Ask the broker how customers' vehicles in your care are covered for theft, what limit applies and what the insurer expects for key storage.
A body shop with a new paint booth
A collision repair shop is installing a new downdraft paint booth and moving to a larger leased building. The landlord's lease asks for specific limits, and the insurer has asked for the booth's fire suppression details.
First steps. Send the broker the lease insurance clause, the booth specifications and the suppression system documents. Ask how the move and the booth change the property and liability terms, and whether cover follows equipment while it is in transit to the new site.
A tire shop blamed for a wheel coming off
A customer lost a wheel on the highway three days after a seasonal tire swap, damaging her car and another vehicle. She says the lug nuts were never torqued properly; the shop's work order shows a re-torque reminder was given at pickup.
First steps. Preserve the work order, the torque records and any signed re-torque notice, and report the claim to the insurer promptly. Ask the broker how faulty work is treated under the policy and whether the damage to both vehicles falls under garage liability.
05 / Words you will hear
The jargon, in plain words
- Garage policy
- A specialised auto and liability policy for businesses that repair, service, store or sell vehicles, built around customers' cars rather than a fleet you own.
- Care, custody or control
- Policy wording for property you are holding or working on for someone else. Many liability policies limit cover for it, which is why shops arrange specific cover for customers' vehicles.
- Faulty workmanship
- A defect in your own work, such as a repair done wrong. Policies often separate the cost of fixing it from the damage it causes afterwards.
- Pollution exclusion
- Wording that limits or removes cover for claims involving contaminants such as oil, fuel or solvents. Shops need to ask what protection is left once it applies.
- Business interruption
- Cover for lost income and continuing expenses while a covered loss, such as a fire, stops the shop from operating. A waiting period usually applies first.
06 / Common mistakes
What trips people up
- Assuming general liability covers customers' vehicles in the shop, when that is often a separate piece with its own limit.
- Letting any staff member road test vehicles without a rule on who drives and where.
- Storing used oil and solvents casually, then finding after a spill that pollution cover was limited.
- Leaving keys in vehicles or on an unlocked board overnight.
- Forgetting technicians' own toolboxes, which can be worth more than the shop's equipment list suggests.
- Adding paint, welding or vehicle sales without telling the insurer the operation has changed.
Ready when you are
Turn this into one clear request.
Save it, add what you know, and choose when to send it. A licensed broker who handles auto repair shop insurance takes it from there.
07 / Questions people ask
Straight answers
What is garage liability insurance?
Garage liability is the liability side of insuring a business that repairs, services, stores or sells vehicles. It responds to claims of injury or damage arising from your operations, and it is often written on a specialised garage policy rather than a general business form. What it includes varies, so ask the broker to show how customers' vehicles, test drives and faulty work are handled.
Are customers' cars covered while they are in my shop?
They can be, but often only if that cover was specifically included. It may apply to damage from fire, theft, collision or a mistake during a repair, with limits per vehicle and per location. The most valuable vehicle you service sets the question. Tell the broker how many cars are on site overnight and roughly what they are typically worth.
Who is covered when a mechanic road tests a customer's car?
That depends on the shop's garage policy and its rules about drivers. Many insurers want to know which staff road test, their driving records and whether there is a route or distance rule. Keep a list of approved drivers, and tell the broker about every employee who might move a customer's vehicle, including lot attendants and part-timers.
Does insurance pay to redo a faulty repair?
Generally the cost of redoing your own work is treated differently from the damage or injury that follows it. A policy may respond to the crash caused by a failed brake job but not to replacing the brakes again. Ask the broker how the policy draws that line, and keep detailed work orders, parts records and torque or test results.
How does used oil affect insurance for a repair shop?
Used oil, coolant, solvents and filters are pollution exposures, and many shop policies restrict or exclude pollution claims. Insurers ask how fluids are stored, whether containers sit in spill containment and who collects them for recycling. Local and provincial rules also govern storage and disposal. Ask the broker what the policy covers if a tank leaks or a spill reaches a floor drain.
Do tire shops need special cover for stored tires?
Seasonal tire storage means holding customers' property, sometimes for months and sometimes off site. Ask whether the policy covers stored tires for fire and theft, what limit applies and whether a separate storage location is listed. Keep a record of whose tires are where, and tell the broker how many sets you hold at the busiest point of the year.
General information, not insurance advice. Broker.insure is a directory and request service: it is not an insurer and does not quote, bind or advise. Policy terms, availability and what is required where you live depend on your situation and on licensed professionals. Updated 2026-10-31.