Garage Liability Insurance
Once the decision is made to open a garage operation, whether it is a sales or service facility, the process is often started with what is needed. When it comes to the insurance, it is often, “what does the state require me to carry for my Garage Insurance” and that is what is purchased. If you have a service facility, insurance may not be a requirement so you purchase a reasonable amount of garage insurance to keep your cost low. If you are a dealership than depending on you state, the garage insurance requirements could be as low as $25,000.
Landlord Requirements for Your Garage Insurance
Here is where we start to see a problem, and it is one our agency will experience on a weekly basis. The landlord requires insurance to protect their interest as owner of the property. Whether it is not clearly discussed, or hidden on the last page of the lease, the customer is not aware of these requirements until after the insurance is purchased and the lease is signed. It could be a couple days or a couple weeks later when the landlord is asking for proof of liability insurance, typically at a limit of $1,000,000.
The good news for your business is that your garage liability insurance includes coverage that will protect the landlord and provide the coverage they require. The bad news is that it is often substantially higher than the original coverage amount purchased. In some cases, the increase in coverage can more than double the premium you started with. As a new business, this change can be very harmful and unprepared for.
Find Out The Requirements Before Signing The Lease
Barbee Jackson Insurance recommends to all new garage operations is to discuss the requirements with the landlord before signing a lease. Be aware that this could potentially be a problem and proactively ask the landlord what they require. Most leases will include an insurance requirement section, where you can provide the requirements to your agent to make sure they are satisfied.
Finally, make sure that you have the requirements (or lack thereof) in writing before signing the lease. This will protect you from a surprise later, as well as providing you with a defense if later something else is asked for. If you have any questions do not hesitate to speak with your agent about coverage options and how best to protect your business.
Barbee Jackson Insurance – Garage Liability Insurance Experts