Garage & Workshop Insurance
A garage holds other people's vehicles and works on them with heat, electricity and flammable liquids. These characteristics create several important insurance requirements: motor trade road risks for vehicles in your custody, and a property policy that contemplates the processes carried on inside.
Cover for customers' vehicles in your custody is an area that is often overlooked. A customer's car is not your property, and it is not covered by your contents. It needs motor trade cover while it is being driven, road tested, moved on site or parked overnight awaiting collection.
Inside the building, the risks are hot work, spraying and electrics. Welding, grinding, paint, thinners and battery charging all sit in the same space, and increasingly so do electric vehicles, which bring a lithium battery fire risk that may require additional fire protection and specialist consideration.
We can advise garage and workshop owners on insuring the premises, the equipment, the vehicles in their care and the liabilities that come with working on them.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Customers' vehicles in your custody
Damage to a vehicle while road testing, moving it on site, or while it sits in the yard overnight. Values have risen sharply, and a single prestige vehicle can exceed the limit an older policy was written with.
Hot work and spraying
Welding, cutting and grinding produce sparks in a building containing fuel, oil, tyres and solvent. Spray booths concentrate flammable vapour deliberately, and their filters and extraction need maintaining as fire protection rather than housekeeping.
Lifting equipment and ramps
Vehicle lifts, jacks and hoists are lifting equipment subject to statutory thorough examination. A vehicle falling from a ramp injures whoever is beneath it, and the inspection record is the first thing sought afterwards.
Electric and hybrid vehicles
Damaged lithium batteries can enter thermal runaway hours after an impact, burn extremely hot and reignite. Insurers increasingly ask whether EVs are worked on, where they are parked and charged, and whether staff are trained for them.
Faulty work and the vehicle afterwards
A brake, a wheel or a repair that fails after the vehicle leaves creates a claim for injury and damage that arises from the work rather than from the premises. That is a products and faulty workmanship exposure distinct from ordinary public liability.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Buildings and contents
The structure, the workshop fit out, ramps, compressors, diagnostic equipment and tools. On this class the equipment value is often a large share of the total and is frequently under declared.
- Structure and workshop fit out
- Ramps, compressors and diagnostics
- Hand tools and specialist equipment
- Stock of parts and consumables
Motor trade road risks
Cover for driving vehicles in connection with the business, including customers' vehicles, road testing and collection and delivery. Written on a third party or comprehensive basis depending on what is being driven.
- Driving customers' vehicles
- Road testing and collection
- Third party or comprehensive
- Named drivers or any licensed driver
Vehicles in custody
Damage to customers' vehicles while in your care on the premises, including fire, theft and accidental damage. The limit should reflect the total value on site at the busiest point rather than an average day.
- Customers' vehicles on site
- Fire, theft and accidental damage
- Limit set to peak value on site
- Overnight and yard parking
Public, products and employers' liability
Injury and damage arising from the premises, from the work you have done and to your staff. The products and faulty workmanship element is what responds when a repair fails after the vehicle has left.
- Injury on the premises
- Claims arising from faulty repair
- Employers' liability, legally required
- Limits typically £5m or £10m
Engineering inspection
Vehicle lifts, hoists, jacks and compressors require statutory thorough examination at set intervals. The inspection duty is separate from insuring the equipment against damage.
- Vehicle lifts and hoists
- Compressors and pressure vessels
- Statutory intervals
- Certificates retained on site
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Work carried out: servicing, MOT, bodywork, spraying, tyres, or vehicle sales
- Whether spraying takes place, and whether there is a booth with maintained extraction
- Hot work controls, and whether welding or cutting is carried out
- Peak value of customers' vehicles on site, and where they are kept overnight
- Security of the yard: fencing, gates, lighting, CCTV and alarm monitoring
- Whether electric or hybrid vehicles are worked on, and charging arrangements
- Lifting equipment on site and the date of the last thorough examination
- Fuel and solvent storage quantities and how they are kept
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
The work carried out
Servicing and MOT work rates most keenly. Bodywork moves it up, and spraying moves it up again, because vapour and flammable materials are introduced deliberately.
Value of vehicles on site
The peak custody value drives a large part of the premium. Prestige and performance vehicles concentrate value in a yard that is unattended overnight.
Security out of hours
Fencing, gates, lighting, monitored alarms and CCTV all count heavily on a class whose worst thefts and fires happen when the premises is closed.
Electric vehicle work
EV capability is increasingly asked about. Trained staff, defined charging locations and a plan for handling a damaged battery all help, because the alternative is an unquantified risk the insurer prices cautiously.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Customers' vehicles assumed to be contents
A vehicle in your custody is not your stock and is not covered by a contents section. Where the motor trade element is missing or the limit is too low, the gap appears at the worst possible moment: a fire in a yard full of cars.
Spraying not declared
Spraying materially changes the fire risk. Carrying it out on a policy written for servicing and MOT work, or outside a proper booth, is a common and serious mismatch between the cover and the operation.
The cost of redoing the work itself
Liability cover responds to the injury or damage a faulty repair causes, not to the cost of doing the job again. That remains a commercial cost of the business.
Lifting equipment without inspection
Where statutory examination has lapsed, both the regulatory and the insurance position weaken considerably after an accident involving the equipment.
Common questions
Are customers' cars covered by our contents insurance?
No. Vehicles in your custody need motor trade cover, both for driving them and for damage while they are on your premises. It is a common gap on this class, and it usually surfaces after a fire or a theft from the yard.
What limit should we set for vehicles in custody?
Enough for the busiest realistic day, not the average. Count what is on site when work is backed up before a bank holiday, and remember a single prestige vehicle can take you past a limit that has not been reviewed for years.
We have started working on electric vehicles. Does that matter?
Yes, tell your insurer. Damaged lithium batteries can enter thermal runaway hours later and reignite after being extinguished. Insurers want to know about training, where EVs are parked and charged, and whether damaged vehicles are quarantined away from the building.
Do our ramps need inspecting as well as insuring?
Yes. Vehicle lifts and hoists are lifting equipment requiring statutory thorough examination at set intervals. That duty is separate from insuring the equipment against damage, and the certificates are what you will be asked for after an accident.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.