Is your maintenance facility covered?

By Tim O’Bryan

INSURANCE BASICS ICONThe continuing series with Tim O’Bryan, president of Service Insurance Agency, Richmond, VA, turns its attention to the maintenance facility, specifically Garage Liability and Garagekeepers Legal Liability. Both are important policies to consider for any operator conducting third-party maintenance.

What are the essential elements of insuring a
maintenance facility?
There are two big policies: Garage Liability and Garagekeepers Legal Liability.
Garage Liability is similar to Auto Liability – it’s the liability that your work may have caused. For example: a garage owner or his/her employees are repairing another operator’s bus, but they make an error. An accident occurs and it can be traced back to that garage. In this case, the garage would rely on its Garage Liability insurance.
Garagekeeper’s Legal Liability covers more physical damage. In the previous example, one of the garage owner’s employees might back another operator’s vehicle into a pole – causing physical damage and calling for Garagekeeper’s Legal Liability insurance.

When should operators obtain Garage Liability and Garagekeepers Legal Liability insurance?
There are some carriers that will write standalone policies for Garagekeepers Legal Liability, while others write Garage Liability as a product of completed operations function of General Liability (GL) coverage.
It depends on the carrier but at the very least, if an operator is working on other companies’ buses, even if it’s just as a “Good Samaritan” and at very random intervals,  that represents an exposure. Operators should invest in, at minimum, a $1 million Garage Liability policy and/or have their GL insurance include Garage Liability with the necessary endorsements.
With Garagekeepers Legal Liability, insurance an operator should assess the most expensive vehicle their garage works on, then pick a limit to cover the potential total value of that vehicle. There is also a deductible that would apply, much like on their physical damage coverage.

Where should garage owners go for these policies?
Most major motorcoach insurance companies write their Garage Liability and Garagekeepers Legal Liability policies, because there’s a lot of “Good Samaritan” situations in the industry, for operators who only do this kind of work as a small percentage of their total revenue.
Everyone wants to help their neighbor, and it’s the right thing to do, but it leaves garages open to liabilities. Even if it’s just one third-party repair per year, think about coverage – or think about not doing it at all. There’s no third option.
“For-hire” garages, or even garages working on many different types of vehicles, should seek a traditional garage policy from a garage insurer, not a motorcoach package. If operators are doing major engine work or major brake work for other people, they need to get the proper insurance coverage.
Property coverage on the building is an obvious necessity. Worker’s compensation for garage personnel is also needed.
If garage work is subcontracted out, make sure all subcontracted employees are also covered.
No matter what, the people on the coach need to be properly insured – either through your policies or verified through their employer.

Tim O’Bryan serves as president of Service Insurance Agency. Since 1952, the company has been committed to the transportation industry. Service Insurance Agency strives to provide the most knowledgeable advice and personal service to all of its valued customers. Visit them online at