FOR ALL YOUR SURETY BOND NEEDS.
Apply for a Tennessee Surety Bond today! Single Source Insurance is a leading TN bonding company. Apply easily online and take advantage of lowest rates. Quickly browse the bonds we offer for this state, or contact us for a full list.
In addition to an�auto dealer bond, Tennessee dealers are also required to purchase garage liability insurance. Learn more about this policy below, and request a quote from Single Source Insurance today.
Garage liability insurance is designed specifically to meet the liability insurance needs of businesses engaged in the servicing and repair of motor vehicles. It protects them from having to pay out-of-pocket for medical bills and damages incurred by non-employees as a result of day-to-day garage operations. It can be bundled with Worker�s Compensation, general liability, and other coverages to create a custom-designed Business Owner�s Policy (BOP). Garage liability insurance is required by law for certain businesses in the state of Tennessee.
The Tennessee Motor Vehicle Commission requires applicants for licensing as an auto repair shop to obtain both a�surety bond and garage liability insurance. Specifically, both repair shops and dealerships with their own repair facilities as well as towing services must maintain a minimum of $300,000 (per occurrence) in liability insurance.
Garage liability insurance is essentially general liability insurance tailored to the needs of auto-related businesses. It has one major drawback, though. While it covers personal injuries and property damage to non-employees that occur in the course of day-to-day business operations, it specifically excludes damage to customers� vehicles that are in the �custody, care, and control� of the business.
Here�s an example. A customer brings in her car saying that it needs the brakes done. The mechanic hops in the car to take a test drive around the block and the brakes fail completely at the first intersection. The car ends up hitting another vehicle, doing a lot of damage to it and injuring the driver.
The garage liability insurance pays for the medical bills of the injured driver and will cover court-ordered damages awarded to the driver (up to the policy limit). It also pays for the damage to that driver�s car. It even covers the loss of the new television the injured driver had purchased minutes earlier and was transporting in the back seat of her car. But it does not cover the damages to the customer�s car that the mechanic was driving.
That�s where garage keeper�s coverage comes in. Adding a garage keeper’s endorsement to the business’s garage liability insurance would cover the damage to the customer’s car because it was in the custody, care, and control of the business at the time of the accident.
Garage keeper�s coverage pays for damage to or loss of customers� vehicles whether the damage results from the actions of an employee or from fire, severe weather event, vandalism, theft, or other cause. It does not, however, cover the loss of a customer�s property that may be in the trunk, glove compartment, or elsewhere in the vehicle. A removable GPS unit stolen from a vehicle would not be covered, but the loss of a built-in one would be.
Depending on the coverages included, the dollar limits on coverage, and the size of the deductible, the owner of an auto-related business could pay as little as $300 or as much as $1,000 or even more for the annual premium on a garage liability policy.
We welcome your questions on the complex subject of Tennessee garage liability insurance. We�ll work with you to design a policy custom-tailored to your needs.
