Garage Liability 301: What is Direct Excess Coverage?

Throughout this series of garage insurance explanations, we have reviewed legal liability and direct primary coverage; it’s now more evident than ever that various levels of coverage exist. Overall, garagekeepers coverage provides protection for damage or loss caused to a customer’s vehicle as a result of the insured’s (your!) legal liability. Standard coverage options include: comprehensive (other than collision), specified causes of loss (for example: fire, lightning, theft, vandalism etc.) and collision or overturn.

In its simplest form, coverage is needed because of the “care, custody or control” exclusion in a general liability policy. As explained in an earlier post, basic garagekeeper’s coverage is based on the “legal liability” you possess, in regard to damages caused to a customer’s vehicle; the deciding factor in this situation is that the customer must prove that you were negligent.

But what if you took every step necessary to protect your client’s vehicle and it was determined that you were NOT negligent for the damage?

This is where our two direct coverage options come into play – direct primary and direct excess.

Protecting your commercial garage with inclusive coverage is critical to your business’ success, leaving us to explain yet another garage insurance option: direct excess coverage. With direct excess, coverage applies in surplus of the vehicle owner’s coverage and as the garage owner you must select a limit for each location.

One way to determine the limit is to consider the average value of the vehicles in your garage’s care multiplied by the average number of vehicles you house at a given time.

For example, if the average value of customers’ vehicles equals $15,000 and the average number of vehicles on hand at your venue typically is 12; a limit of $180,000 would be selected:

($15,000 x 12 = $180,000)

It’s also important to keep in mind that garagekeepers coverage is subject to various exclusions, such as contractual obligations, theft by the insured, defective parts, faulty work, etc. It’s clear that selecting an appropriate garage insurance policy take work, research and patience, but once inclusive coverage is in place your venue can operate smoothly and more efficiently. The true differences in coverage really come down to liability insurance and coverage for damages, so working with an experienced professional who understands your industry can make the insurance process that much easier.

Interested in learning more about garage insurance? Contact the coverage experts at Wolpert Insurance to discover your specialized commercial insurance options today!