If you operate a business that puts someone else’s property under your care, custody, or control, you have special insurance needs to consider. For a car wash, this includes customer vehicles. Connecticut car wash owners often assume the commercial general liability policy they already carry will cover damage to a customer’s car. However, what they need in these situations is garagekeepers liability insurance, a separate form with its own limit, deductibles, and trigger.
The Care, Custody, and Control Evaluation
A commercial general liability policy excludes property damage to personal property in the care, custody, or control of the insured. That is exclusion j.(4) in the standard ISO form, and courts apply it case by case, weighing temporary charge, a duty to guard, and authority over where the property went.
A full-service wash that takes the keys, moves the car, and parks it typically satisfies all three tests, so the general liability carrier will usually deny a claim for a customer’s vehicle. The car owner’s own physical damage coverage may pay the repair, and if the car wash is legally responsible for the damage, that insurer can then bill the business for what it paid (known as subrogation).
If you lack the proper insurance, damage done to a customer’s vehicle will in many cases have to be paid directly by the business.
What Garagekeepers Coverage Actually Responds To
Garagekeepers insurance pays for physical damage to a customer’s vehicle placed in your care while you are attending, servicing, repairing, parking, or storing it. That generally includes damage from a conveyor, trim snapped off in the tunnel, and two vehicles making contact in the queue, for example.
Theft and vandalism shouldn’t be taken for granted, because some carriers only add them by endorsement. A car stolen off your lot overnight, or keyed while it waits for a detail, may or may not be paid for by your garagekeepers coverage, depending on your exact policy.
What the Form Leaves Out
Faulty work may sit outside garagekeepers. Shops that do a great deal of detail work hold most of that exposure. Theft by your own employees or shareholders, and liability accepted by agreement, are also not covered by garagekeepers coverage.
Legal Liability Compared With Direct Primary
Garagekeepers comes in multiple versions, and which one you carry decides what happens when a claim is disputed. A legal liability form pays only when the wash is shown to be at fault, and a direct primary form pays for the damage whether or not anyone proves you caused it.
When a customer says your tunnel cracked a side mirror and your attendant is certain it was already loose, the difference in policies is clear. A legal liability form turns that disagreement into an investigation that can end in a denial. Direct primary fixes the mirror while the issue is still being investigated.
| Consideration | Legal Liability Form | Direct Primary Form |
| Trigger | Insured legally liable | Damage occurs while the auto is in your care |
| Fault disputed | Claim may be denied | Claim still responds |
| Relative premium | Lower | Higher |
| Customer resolution | Slower, fault settled first | Faster |
Limits and Deductibles Washes Get Wrong
The limit on your policy covers the whole site rather than each car separately. Twenty cars in your lot pitted in a hail storm is a single claim, and a deductible can apply once to the whole event or once to every vehicle in it, depending on your policy.
Twenty cars damaged in one hail storm at $500 each can cost you $10,000 before the carrier covers anything. The same loss with a single-event deductible would only have you paying $500.
Check your limit against the cars that actually come through your site. Quotes should be set against the vehicles in your market and the actual costs that damages might reach.
Coordinating Garagekeepers With the Rest of Your Program
Garagekeepers is designed for a specific risk and is meant to support other coverages. General liability helps protect you from claims involving bodily injury and many forms of property damage. Commercial property protects your building and assets. Equipment breakdown responds to sudden mechanical or electrical failure of your equipment. Garagekeepers helps to fill gaps that none of these other policies reach.
Posting signs disclaiming responsibility or stating limited liability for damage to customer vehicles may do less than owners think. Connecticut courts have declined to enforce that kind of notice when a business has care, custody, or control of customer property, though you should consult with an attorney if you have legal questions.
Have JMG Review Your Car Wash Garagekeepers Schedule
If you have questions about what your current policy covers or what your business needs, JMG Insurance Corp can read your policy with you and explain where you’re covered and where you’re exposed. With more than 150 carriers to compare, we can show you how other programs handle the issues you deal with on a weekly basis. Contact JMG to have the form checked against how your wash actually runs.
