Auto Repair Shops: Does Your Business Insurance Policy Provide Garage Keepers Coverage?
- Rabih Hamawi
- 4 hours ago
- 3 min read
For business owners, having adequate commercial insurance coverage is essential for protecting their business from unexpected financial harm. But for collision shops, auto repair shops, and anyone else working on repairing cars, trucks, or other motor vehicles, there’s one type of coverage you definitely don’t want to overlook: garage keepers insurance.
What is Garage Keepers Insurance?
Garage keepers insurance protects your customer’s cars, trucks, or other motor vehicles, while they’re in your “care, custody, or control.” In other words, garage keepers coverage protects the business in the event a customer’s car, truck, or other motor vehicle is damaged or stolen.
While one damaged car, truck, or other motor vehicle may not be enough to financially devastate a business, imagine if a fire breaks out destroying each car, truck, or motor vehicle in your shop. Without garage keepers coverage, your business may be responsible for all the damage, and you’ll likely face numerous lawsuits from customers.
Garage keepers coverage is especially important for Michigan businesses. This is because under Michigan law, if a customer’s car, truck, or other motor vehicle suffers damage after it’s been in someone else’s care, custody, or control, there’s an automatic presumption that the business was negligent.
Michigan Garage Keeper’s Liability Act
The Michigan Garage Keeper’s Liability Act, MCL 256.541, is the law stating that proof of damage alone is enough to establish liability. The statute says:
Whenever any damage shall be done to any motor vehicle while in the possession or under the care, custody or control of the owner, his agent or servant, or the keeper of any public garage or other establishment where such vehicle shall have been accepted for hire or gain, proof of such damage shall be prima facie evidence that such damage was the result of the negligent act of such owner or keeper of the place where such vehicle was stored.
In other words, the car, truck, or motor vehicle owner doesn’t need evidence proving that the business caused the damage to establish liability. Instead, the car, truck, or motor vehicle owner only has to show that there is damage.
Luckily, the business owner can try to avoid liability by producing evidence that the damage existed before the vehicle was dropped off. But instead of leaving it up to chance, it’s better to be proactive by purchasing garage keepers insurance before a tragedy even occurs.
Not Sure if You Have Garage Keepers Insurance?
Read your insurance policy carefully. Regularly reviewing your policy is essential for making sure you have the right coverage to protect your business. After all, it’s not uncommon to request certain coverage, only to find out later that your insurance agent failed to procure the coverage you requested.
If your insurance agent has failed to procure the coverage you requested or failed to advise you on the proper insurance coverage, contact Law Office of Rabih Hamawi for a case evaluation at (248) 905-1133 or www.hamawilaw.com.
Who is Rabih Hamawi?
Attorney & Counselor
Rabih Hamawi is a principal at the Law Office of Rabih Hamawi, P.C. and focuses his practice on representing policyholders in fire, property damage, and insurance-coverage disputes against insurance companies and in errors-and-omissions cases against insurance agents. He may be reached at (248) 905-1133.