Garage keepers liability

The moment a customer hands you keys, their vehicle becomes your problem in a way that standard policies handle badly. Commercial property covers your building and your contents, not their property. Your auto liability covers vehicles you own or operate. Their car, sitting in your lot, service bay, or valet stack, falls into the gap. Garage keepers liability is the coverage built for that gap.

It is typically offered on a couple of different bases, and the difference is worth understanding before a hurricane, a hailstorm, or a fire. A legal liability basis pays only when you were legally responsible for the damage. A direct primary or direct excess basis pays for covered damage to the customer's vehicle whether or not you were at fault, which is what most customers assume is in place when they hand over keys.

Dealerships, repair shops, detailers, valet operations, storage facilities, and body shops all live here. So does anyone whose lot fills with expensive vehicles during an event. Values change fast, so the limit should be reviewed against what is realistically parked there on the busiest night of the year.

Related terms

This page is education, not advice. Policy language varies by carrier, form, and state, so confirm how your own program is written with a licensed insurance professional.