Ontario Mechanic Insurance

Auto Shop Insurance for Mechanics and Garage Owners in Ontario

Most Canadian households own or lease at least one vehicle, and it's not hard to understand why—our cities and towns are structured around driving as the primary mode of transport. That means mechanics and auto repair shops provide essential services that are necessary for our lives. However, as an auto shop owner, you are exposed to the common risks that most business owners face, as well as some additional risks related to storing and working on vehicles of all types and descriptions.

Without the right mechanic insurance coverage, you can end up facing the harsh reality of paying out of pocket for major expenses such as repair or restoration to recover from damage caused to your commercial property, as well as the potentially astronomical costs of being sued for causing third-party property damage, pollution and much more. Be aware of these business-ending costs when you can get the financial protection you need by calling the experienced brokers at Morison Insurance to find out more about Ontario mechanic insurance coverage.

What is Mechanic Insurance?

Mechanic insurance or auto shop insurance is a package of business insurance coverages designed to address the insurance needs of mechanics. With the right Ontario mechanic insurance on their side, auto repair shop owners can access the insurance compensation they need to deal with litigation costs if they have legal action brought against them or to handle the expenses involved with recovering from damage to their commercial property from an insured peril such as a fire or natural disaster.

The reason why it's so essential to have auto mechanic insurance is because, during your business operations, you are certain to encounter situations that you will not be willing or able to pay out of pocket to resolve. Whether that's being sued for damaging a customer's vehicle or installing a faulty part, paying fines for causing a polluting event, getting your auto shop back up & running and equipment repaired after a flood or many other possible scenarios, you’ll need the correct type of auto shop insurance that applies to the problem at hand. You can file a claim with your insurance company and get financial assistance for those expenses up to the coverage limit on your policy.

Who Needs to Have Ontario Mechanic Insurance?

Undoubtedly, an auto repair business owner needs auto mechanic insurance, but these types of insurance coverages can apply to more than just automotive repair shops. The right kind of mechanic insurance is also necessary for any business that repairs, maintains or stores vehicles, including:

• Muffler repair shops
• Oil change shops
• Transmission repair shops
• Battery and tire repair shops
• Auto detailing shops
• Gas stations
• Service stations
• Parking garages
• Towing and impounding lots
• New and used car dealerships

What Types of Coverage Are Available for Mechanic Insurance?

Your garage may offer the same services as the auto shop down the street, but you still have different insurance needs. Everyone chooses to operate their business in a slightly different way, which means everyone has different risk exposures that need to be considered for auto repair shop insurance.

Every mechanic insurance package will be different because your insurance is tailored to your unique business and insurance requirements. There is a wide range of options available for the types of insurance coverage that can be included in a mechanic insurance package. Some, such as commercial general liability and commercial property insurance, are necessary coverages for any auto shop. Here are some of the most important mechanic insurance coverages you should know about.

Commercial General Liability (CGL) Insurance

Commercial general liability insurance is a standard and very important part of most commercial insurance packages, so it's necessary for Ontario mechanic insurance. Commercial general liability offers you financial protection against the costs of being sued for allegedly causing third-party bodily injury, third-party property damage or personal injury due to libel or slander.

CGL is sometimes called "slip and fall" insurance, and that's the classic example of a CGL claim: a customer comes to your shop and slips on an icy walkway or trips over something that was left out in the office and injures themselves, then they choose to sue you for causing them bodily injury. However, when it comes to mechanics who are, of course, working on and around the expensive property of their customers, third-party property damage is an important coverage in commercial general liability for commercial general liability coverage. Imagine the worst thing that happens: A fire breaks out in your shop overnight, destroying neighbouring buildings or units.

In those situations, the insurance company that issued your CGL coverage would offer you insurance compensation. Still, it also gives you financial assistance to deal with legal costs in case you are sued, such as legal mediation, attorney fees, court fees, and settlement costs if you are found liable in court. Hence, the plaintiff can get the compensation deemed liable by the court.

Garage Automobile Liability Insurance

Garage automobile liability insurance, sometimes called garage keeper's insurance, is a type of liability coverage that applies when you or your employee cause accidental damage to a customer's vehicle. Under this separate policy, there are legal liability options for damage to customers' vehicles. For example, if one of your mechanics was moving a car into the garage and accidentally side-swiped another vehicle that was parked too close, the owners of one or both of the vehicles could choose to bring legal action against you to recover the cost of repairing the vehicle, or in the event of a write-off, replacing it altogether. In that event, you would need garage automobile liability insurance to get necessary to compensate the owner of damaged customers' vehicles.

Pollution Liability Insurance

It's no secret that vehicles require potentially hazardous materials such as gasoline, motor oil, and coolant, which can cause pollution if they end up in the wrong place. Even seemingly benign car parts such as tires can cause polluting events if they aren't handled, stored and disposed of correctly. That's why pollution liability insurance is a highly recommended addition to an Ontario mechanic insurance package. Pollution liability insurance covers the resulting costs from both a slow and a sudden polluting event. A slow pollution event would be something like an old radiator leaking coolant into the soil over a long period, while a sudden pollution event could be accidentally dumping gasoline or oil into a nearby waterway, for example.

Expenses related to a pollution event can vary from financial penalties and government fines to emergency response costs, clean-up fees, and many other possible expenses. Suppose you have pollution liability coverage in your mechanic insurance package. In that case, you can get financial help from your insurance company for those costs should you be found liable for causing the pollution up to the pollution liability limits on your policy.

Commercial Property Insurance

You may have a large commercial garage facility that is capable of holding dozens of vehicles at a time or a small neighbourhood repair shop with one or two vehicle bays, but either way, commercial property coverage is an absolutely critical coverage to add to your Ontario mechanic insurance. From theft and vandalism to fires, floods and natural disasters, countless problems could render your commercial space unusable or destroy your tools and equipment. That would have a huge negative impact on your bottom line, and it could take quite a while to recover to the point where you could accept work from your customers again.

The services you offer are likely dependent on having the right physical location and equipment to carry out the vehicle repair and maintenance work, so a major loss due to something like a fire or flood could mean the end of your business if you can't afford the eye-watering costs of repair, replacement of equipment and building restoration. But suppose your Ontario mechanic insurance package includes a commercial property insurance policy. In that case, you can file a claim with your insurance carrier to get the funds necessary to take care of all those issues and get your business up and running again as soon as possible.

Commercial Auto Insurance

In Canada, it is mandatory to have auto insurance for any vehicle being driven; of course, commercial vehicles are no exception. Any business- or broker-owned vehicle must be covered by commercial auto insurance if it is being used for commercial purposes, so this is essential coverage for any mechanic insurance package when you're sending out a mobile mechanic in a tow truck to handle roadside service calls. But it's also needed for other vehicles used for business purposes, such as a truck you're using to pick up parts from a supplier and bring them to your auto repair shop.

Other Types of Mechanic Insurance Coverage

• Product Liability Insurance
• Equipment Breakdown Insurance
• Tools and Equipment Coverage
• Cyber Liability Insurance
• Business Interruption Insurance
• Inland Marine Coverage
• Non-Owned Auto Insurance
• Professional Liability Insurance
• Employment Practices Liability Coverage
• Mobile Property Insurance
• Commercial Umbrella Insurance

Do I Need Garage Auto Liability If We're Not Driving Customers' Vehicles?

You may not be taking your customers' vehicles for rides around town. Still, you do likely need to move them from place to place occasionally, even if it's just a few feet away, and that presents an opportunity for accidental damage. But as any mechanic knows, it's entirely possible to damage a vehicle that is just sitting there and not being driven. That's why it's important to have garage automobile liability with your mechanic insurance.

It's easy to think you won't need garage automobile liability because you know what you're doing and will be careful, but that's not realistic—accidents happen. It only takes one small slip-up to cause serious physical damage when you're working with expensive, complex machines.

Is Garage Liability the Same Thing as Garage Automobile Liability?

They're not the same, though it's understandable that they're often confused with each other as they have similar names and similar purposes. Garage liability insurance is similar to commercial general liability insurance because it offers you liability coverage against costs related to third-party bodily injury and third-party property damage. It can also include additional endorsements, such as product liability if you manufacture and/or install parts in customers' vehicles.

Garage automobile liability, on the other hand, is third-party automobile coverage. An example of a situation where this type of coverage would be needed is if a mechanic were to take a customer’s vehicle for a test drive and have an accident with a third party and cause third-party property or bodily injury.

Both types of coverage are important additions to mechanic insurance to ensure you have the proper coverage for events in which you could be found liable.

How Can I Get a Quote for Ontario Mechanic Insurance?

Suppose you're looking for the right Ontario mechanic insurance for your auto shop business. In that case, the first step is to pick up the phone and call a friendly insurance professional at Morison Insurance. Our experienced brokers can ensure you get the best custom-built insurance plan to address your specific insurance needs and give you the peace of mind that comes with knowing you're backed by robust financial protection in the event of an insured peril. Call us today at 1-800-463-8074 to speak to a licensed broker.

This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.