Tips that could help protect customer vehicles in your body shop's care

Unforeseen issues may happen while you're servicing customers' cars. Make sure you're covered.

State Auto Body Shop

by Nick Partridge
Senior Account Executive at State Auto

When customers leave their car at your auto body shop for repair, they likely have a lot on their mind. Either they've recently been in an accident, or they've had a breakdown of some sort that leads them to need your services.

You know what may NOT be on your customers' minds? The risk of something happening to their vehicle while at your shop.

Yet things happen while vehicles are being serviced. A mechanic might accidentally back one vehicle into another during a test drive, or a vehicle could be left outside, and is damaged by a hailstorm overnight.

When a vehicle is left with your business for service, there's specific insurance coverage you can purchase to help protect it. Garagekeepers coverage provides physical damage coverage, comprehensive and collision, to vehicles left in what the insurance industry calls your "care, custody and control." There are three types of Garagekeepers coverage: Direct Primary, Legal Liability and Direct Excess. The most frequently chosen option is Direct Primary.

Direct Primary will pay for any damages, while the vehicle is in your care, custody and control, from a covered loss. Direct Primary supplies broader coverage, but at a higher cost and no need to prove legal liability.

Legal Liability is intended to help protect your customers' vehicles from damage that the shop could be held liable for, due to negligence while in your care, custody and control.  For example, if a customer's vehicle was left unlocked and unattended, then broken into or stolen, this would be a scenario in which Legal Liability could apply. The key difference between Legal Liability and Direct Primary is that Direct Primary will pay regardless of fault.

Direct Excess works similarly to Direct Primary. Direct Excess will pay for damage to the customer's vehicle in excess of any amount collectable under the owner's policy or that its owner's coverage will not pay for, on a claim for damages from a covered loss. The difference with Direct Excess is that it will only kick in after any other applicable insurance has paid out.  In the case of the hailstorm scenario mentioned above, if your customers' vehicles experienced damage from the hail, and have insurance that will cover their vehicles, your Direct Excess will apply only after their insurance has been applied.

As an auto services shop owner, you have several items that need to be on your mind. These should be at the forefront: First, make sure you have the right Garagekeepers insurance coverage in place. Second, take steps to reduce your chances of having a claim for damage to a customer's car. Lastly, carry a high enough limit to cover the potential losses.

The shop managers and supervisors should lead employee discussions on how to prevent accidents and damage to their customers' property. Below are the categories of information you should consider covering with all newly hired auto service employees. These items should be continually reviewed with all staff members.

Make onsite controls standard procedure for all employees.

There are specific things you can implement, which could help to increase your ability to monitor your operation, and reduce the risk of a potential loss. Signs indicating where customers should park, security cameras, and adequate parking lot lighting are just a few things you can do. Make sure these controls are installed and maintained.

Update your work procedures to include controls that must be done regularly to be effective, such as conducting a walk around inspection of every vehicle, and signed off on by the customer and the shop manager at drop off. Implement standard procedures such as asking customers to remove valuables from their vehicle, and even designating where you keep the customer's keys while you have the car.

Hire the right people, and provide the right training.

Risk management includes having the right people on the job. Adding certain checks to your hiring process can go a long way to help ensure you're bringing qualified people on board. And, continuing to evaluate employee performance is critical to maintaining a well-run operation. Confirming a new hire has a valid driver's license seems simple, but could be just as important as making sure they have an acceptable driving record.

Once hired, ongoing training should be a priority. First, make sure each employee has been provided the right training needed to do their job, and has been allowed time to fill any training gaps. Then, keep training up to date by providing regular opportunities to learn about new vehicles, processes, safety procedures and services.

The people servicing cars must also be good at driving them.

Of course, driving ability and training are important, but, it's also critical to establish safe driving habits. Before backing up a vehicle, get out of the car, and fully check the area around it to make sure nothing is in the way. Ask for help from a co-worker when there is limited visibility. Brush off all the snow off the car before moving it. These are things that can easily be missed when in a rush on a busy day at your shop. However, they're also common ways that accidents and damages occur.

Finally, consider implementing procedures and training around reporting accidents. If a vehicle in your shop is damaged, the details are important. Even who completes and receives the reports should be standardized. And, management should review accident reports with employees to help avoid similar accidents in the future.

As an auto services shop owner, your next step should be to talk to your insurance agent. Use these professionals as a resource to help make sure you have the right insurance protection and risk management practices in place to help keep your customers happy and your business on the right path.


This article is intended for general information purposes only, and is not an insurance policy. State Auto makes no representations or guarantee as to the correctness or sufficiency of any information contained herein, nor guarantees results based upon use of this information. State Auto does not warrant that reliance upon this document will prevent accident or losses or satisfy federal, state or local codes, ordinances or regulations. If expert assistance is needed, the services of a competent professional should be sought. The reader assumes the entire risk as to use of this information.