Auto Mechanics Insurance

You own an auto-body shop. You're a mechanic by trade, but you're a business owner too. You have to protect your assets, your employees, your way of life. You know that your company can't survive without insurance. What's less obvious is the amount and type of insurance you need. You want to shield yourself from risk, but you don't want to go bankrupt paying expensive premiums. It's important to discuss your insurance needs with a licensed insurance professional that understands your business.

Here are a few of the insurance policies that you should consider:

General Liability.

You need this. In many states, you can't operate without it, and in all the others, you would be reckless not to carry it. General liability will protect your company from expenses that are caused by you or employee's negligence. If one of your mechanics injures a customer on the job, this policy will step in to take care of the costs. Similarly, if you or a mechanic cause damage to a client's car or personal property, you likely will be covered in your general liability plan. These policies vary and can cover wide variety of losses or a limited few. Make sure what's covered and what's with your insurance agent.


Property commonly covers claims filed against you and your employees for damages to clients' property. In your case, most of the claims will likely deal with car repairs. You can also purchase a line of property or real estate insurance to cover your body shop. This will help you in the very likely circumstance that your building and property are damaged by your employees in the course of business.

Business Owner's Liability Coverage.

This is a usually a combination of general liability and property insurance. Carriers offer these packages in an effort to reduce costs for businesses. Speak to your insurance agent, crunch the numbers, and determine if you're better off going with this type of a policy or if you should keep your property and GL insurance separate.

Errors and Omissions.

Your body shop, you, and your mechanics are considered specialists. Customers trust their vehicles with you and your employees because they expect you to be able to fix their cars in an affordable, legal, and professional manner. If you fail to meet clients' expectations, and if your mechanics use poor judgment, are improperly trained, or are incompetent and damage customers' cars, then you need E & O insurance to protect your company. If you're ordered to fix the mistakes, you don't want to be without E & O insurance to help you pay the bills.


You're likely aware that you need to protect your business from crime. You have thousands of dollars’ worth of tools and several cars on your lot at all times. If someone decides to steal from you, you need the peace of mind that insurance can provide. Carriers offer policies that will cover losses and expenses that result from criminal activities.

Workers' Compensation.

Workers' compensation insurance is required in most states. Even if you can opt out, it's unwise to do so. Work comp covers medical expenses, lost wages, and disability payments for employees injured in the course and scope of employment. If you don't have a policy in place, you could face fines, suspensions, or thousands if not millions of dollars in court orders to pay bills associated with your workers' injuries.

Disability Insurance.

Disability insurance will cover your employees if they need time off work for a disability. If one of your workers has a mental or physical disability that renders them incapable of working, disability insurance will help you support them until they get better. Workers' compensation will take care of disability payments that result from a work-related injury, but not for expenses that result from medical conditions that result from natural causes, outside of work. The best way you can show loyalty to your employees is to help them when they need it the most.

Health Insurance.

If you employ more than 50 full-time workers, then you need to provide your staff with health insurance. Although the debate over the future of the Affordable Care Act remains up in the air, as of today, you must provide health insurance to stay on the right side of the law. Even if the law changes, it likely will be years before the new requirements are ready. You don't want to be taken by surprise by new policies. Put your medical insurance plan in place today. You can always go back and change it later.

Equipment Insurance.

At your body shop, you have thousands of dollars of equipment. You have lifts, drills, and parts that you have to protect. You can't afford to replace all of your equipment. When a heavy lift or expensive, critical tool breaks, you don't want to have to foot the bill. Equipment insurance will help you replace your tools and machines as quickly as possible. Make sure you discuss what's included and what's not with your insurance agent. Equipment is a broad term, so it's critical that you understand what's covered and what's not.

Loss of Income.

This plan will help you pay the bills in the event that your shop needs to shut down, partially or completely because of a covered loss. The insurance will pay out benefits in the amount and frequency established in your policy, so pay attention to the limits, premiums, and deductibles before you sign on the dotted line. Loss of income insurance will pay you the wages you would have earned, but for the covered loss. This way, one policy will pay for the covered loss and the other will pay you back for your wages. This will help keep your company afloat when business is slow.

Cyber Security and Identity Protection.

You would be foolish not to purchase at least some cyber security insurance in today's digital marketplace. Hackers can do significant damage to your business and your clients. When you're the victim of cyber-crime, you want to know that you have the insurance you need to weather the storm and to reimburse your customers for the money or data they lost.

Assault and Battery Insurance.

Auto mechanics aren't strangers to fights. When you and your staff are working on cars, tempers can flare and fights can break out. If this happens, you need to make sure the equipment and damages caused are covered. You also need to protect clients who may be injured as a result of fights like these. Assault and battery insurance will help you pay for the expenses associated with assault and battery on your premises.

Employment Practices Liability.

This will protect your company if one of your mechanics or staff members is accused of harassment or discrimination. Your employees come into contact with many customers every day. If one of them bothers a client or a co-worker, you need to be able to pay for an attorney to defend your company. Employment practices liability will cover expenses that result from harassment and discrimination claims.


In 2017, it's hard for a business to survive without competent marketing and advertising plans in place. If you make a commerical, run an ad on the radio, or online, you need to make sure your intellectual property is safe. You also need to protect yourself in the event that a competitor claims that you stole your ideas from them. Protect your reputation with advertising and intellectual property insurance.

Fire Insurance.

Fires are unpredictable. When your business is the site of an out of control fire, you don't want to be without the proper insurance. Property and general liability insurance won't cover all losses associated with fires. Talk to your insurance agent about fire insurance for your body shop.


Excess insurance is like it sounds. It's insurance above the base limits of your policies. Typically, excess insurance is applied to general liability and property plans. Talk to your insurance agent, discuss your options, and decide if you need more insurance than what your initial layer provides.

Past, Present, and Future of Auto Mechanics Insurance

Decades ago, auto mechanics weren't as necessary as they are today. Don't get me wrong, my parents and grandparents needed them, but many more people, or so it seems, knew how to take care of their cars on their own. Vehicles were also built in ways that allowed owners to complete the work in their garages. Many of the cars that roll off the assembly lines today are built in a way that makes it difficult, if not impossible for car owners to change their own oil, fluids, and tires. Unless you have a lift at home, you likely won't be able to fix your car by yourself.

needed, and fix their cars after work. Now, many people would see this as a waste of time and money. I, for instance, would be screwed if I had to repair my car by myself. Many of us don't have the knowledge and skills needed to take care of our vehicles ourselves.

This may seem like welcome news for you, the car mechanic, and in many ways it is. It guarantees that you'll have steady work, but it also puts a lot of pressure on you and your employees. Today, you, the mechanic, are expected to know all there is about cars. You're supposed to be the jack of all trades when it comes to the automobile. If you can't fix it, who can?

In light of this, you need more protection. Customers aren't going to ignore your mistakes, you need E & O insurance to protect your company when you and your employees make mistakes. Cars today are expensive, as well. This means that you can't afford to eat the costs of a bumper that your head mechanic accidently broke. Those costs add up, quickly. You need insurance in place to protect yourself from the claims, lawsuits, and complaints that you're sure to confront in your line of business.

In the future, many of these risks will remain. It's unlikely that people will re-learn how to take care of their cars. You would be naive to think that you and your business can thrive if you don't at least have the insurance plans in place to survive. You need to protect your interests at all times.

Self-Driving Cars

Self-driving cars present a new level of risk for auto body shops. The important question will be: who owns the car? If the vehicle is the property of an individual or family, then the insurance will likely be similar to what it is today, but what happens if it's owned by a company? What if a fleet of self-driving cars are brought into your shop? If this happens, you'll need to be extra careful.

Soccer moms aren't likely to complain as much as a ride-sharing company. You could also be blammed and even sued if that self-driving car is later involved in an accident. If this happens, the ride-sharing business could try to shift blame from them to you. They could claim that your repairs were inadequate and they could allege that the accident wouldn't have occurred, but for your failure to provide proper services.

One person suing your body shop is a problem, but an entire company could force you to close your doors if you're not properly insurance. No one knows when or if self-driving cars will become the norm, but if they do, it will have a significant impact on the insurance industry. Do your research and put the insurance plans in place to ensure you can stay in business well into the future.

You Need Insurance

You and your company won't make it without insurance. You need it, there's no way around it. When you're looking for insurance, don't rush it. Take the time to speak with your insurance agent, business partners, and choose the policies that will shield you from risk and keep your auto body shop in business for years to come.
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