Hidden Insurance Gaps That Can Cripple Your Auto Repair Shop… And How to Avoid Them

By Earl Van Buskirk Jr

After nearly 25 years working with auto repair businesses, I’ve seen too many shops blindsided by insurance gaps they didn’t know they had. Sometimes, we’ve been able to catch these issues early and help shop owners avoid major losses. But in other cases, we’ve been called in after the damage was done, when it was too late to make a difference.

 Here are four of the most common insurance blind spots we see in the auto repair industry. These oversights can cost your shop thousands, or even force you to shut your doors:

Environmental Liability

Oil spills, antifreeze leaks, and improper disposal of hazardous waste aren’t just messy, they can trigger major environmental liability claims.

Even something as simple as a spill in your parking lot can lead to EPA fines, cleanup costs, and third-party lawsuits. General liability policies typically exclude these exposures, meaning you’ll need dedicated environmental coverage to be protected.

Downtime / Business Interruption

What if a fire, flood, or vandalism shuts down your shop for a week or longer? Will your insurance keep your income flowing while you rebuild?

Many auto repair shops don’t carry adequate business interruption coverage, or they underestimate how long a rebuild or equipment replacement might take. That gap can be financially devastating, especially if you’re still covering payroll, rent, and utilities during the shutdown.

Inadequate Garagekeepers Liability Limits

If you’re storing customer vehicles, whether for a few hours or a few days, you’re responsible for them. But too many shops have outdated or low Garagekeepers Liability limits.

A fire, theft, or accident on your property could damage multiple customer vehicles at once. Without the right limits, you could be forced to pay the difference out-of-pocket and that’s a risk no shop can afford.