In simple terms, Garage Liability combines coverages from a Commercial Auto Policy and a General Liability Policy. Garage Liability has three parts – Auto Liability, Other than Auto Liability, and Aggregate Limit.
Auto Liability provides coverage for the operation of covered autos in the garage operations. Covered autos are designated by the coverage symbols on the policy, similar to a commercial auto policy. As an example, if a garage employee accidentally strikes and injures a pedestrian while test driving a customer’s vehicle, the auto liability part of the policy responds. There is only a per occurrence limit for this coverage part and no aggregate applies.
Other than Auto Liability covers bodily injury or property damage as a result of garage operations other tan operating an auto. It is very similar to premises/operations and products/completed operations on a general liability policy. For example, if a customer slips and falls on the premises and is injured, the Other Than Auto Liability coverage would respond up to the policy per occurrence limit.
The Aggregate Limit for the policy only applies to the Other Than Auto Liability. Just as in a general liability policy, any payment made to the injured party in the slip and fall example mentioned above would be subtracted from the aggregate amount for the remainder of the policy period. If other claims occur, once the aggregate limit is exhausted, the policy would no longer pay. Most policies have provisions which will pay defense and some miscellaneous costs over and above the policy limits.
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