Running an auto repair shop, body shop, tire store, transmission shop, or other automotive service business means your employees are trusted with one of your customers’ most valuable possessions—their vehicle. Yet one of the most common and costly mistakes we see as insurance professionals is garage owners failing to notify their insurance agent when they hire a new mechanic, porter, service technician, or any employee who may drive or move customer vehicles.
That oversight can have devastating consequences.
Your Insurance Carrier Needs to Know Who Is Driving!
Many garage insurance policies require that employees who operate customer vehicles be disclosed to the insurance carrier. This includes anyone who may:
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Move customer vehicles around the shop
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Back vehicles into or out of service bays
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Perform road tests after repairs
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Transport vehicles between locations
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Pick up or deliver customer vehicles
If a new employee is not reported, your insurance company may determine that the individual was not an approved driver under the policy. Depending on the policy language and circumstances, that could create a serious coverage issue or even result in a denied claim.
Always Check Driving Records Before Hiring
A best practice for every garage owner is to have prospective drivers’ Motor Vehicle Records (MVRs) reviewed before they are hired to drive customer vehicles.
A history of DUI convictions, reckless driving, excessive speeding tickets, suspended licenses, or multiple at-fault accidents may indicate that the individual presents a significantly higher risk. In many cases, your insurance agent can work with your carrier to determine whether the individual is acceptable before they ever get behind the wheel.
This simple step can help protect:
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Your business
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Your customers
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Your employees
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Your insurance coverage
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Your reputation
A Real-World Example
Imagine your shop finishes repairing a customer’s late-model luxury vehicle. A newly hired mechanic—whose driving record was never reviewed and who was never reported to your insurance carrier—is asked to back the vehicle out of the service bay for delivery.
While backing out, the employee accidentally strikes a pedestrian, causing catastrophic injuries.
During the claim investigation, the insurance carrier discovers the employee was never disclosed as a driver and was operating with a poor driving history that would not have been acceptable to the carrier.
Now your business could face:
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A coverage dispute
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A denied or limited insurance claim (depending on the policy and facts)
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Significant legal expenses
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Potential personal liability for the business owner
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Damage to your company’s reputation
No garage owner wants to be in that position.
Due Diligence Matters
As the owner of the business, you have a responsibility to exercise reasonable care when allowing employees, mechanics, porters, or independent contractors to operate vehicles on behalf of your company.
If an accident results in serious injuries, attorneys will often examine questions such as:
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Did the employer review the driver’s qualifications?
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Was the driving record checked?
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Was the employee properly trained?
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Was the driver disclosed to the insurance carrier?
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Did the business follow its own safety procedures?
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Does your company have a Driver Safety Program?
Having documented hiring procedures and reviewing driving records before authorizing employees to operate customer vehicles demonstrates that your business exercised due diligence.
Develop Written Driver Policies
Every garage should maintain written policies that address:
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Driver qualification requirements
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Driving record review procedures
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Reporting new drivers to the insurance carrier
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License verification
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Accident reporting procedures
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Vehicle test-drive policies
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Employee safety training
These procedures can reduce risk and help create a safer workplace.
We’re Here to Help
At Insurance Incorporated, we help garage owners identify potential exposures before they become expensive claims.
We can assist with:
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Reviewing your current garage insurance program
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Evaluating new employee driving records
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Helping determine driver acceptability with your carrier
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Reviewing safety policies and procedures
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Providing competitive garage insurance quotes
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Identifying potential coverage gaps before a loss occurs
A five-minute conversation before a new employee starts driving customer vehicles could save your business hundreds of thousands—or even millions—of dollars in potential liability.
Contact Insurance Incorporated
If you have questions about your Garage Liability, Garagekeepers, Commercial Auto, or overall garage insurance program, we’re here to help.
Insurance Incorporated
📞 877-898-9333
Or click here to request a free garage insurance quote and let our experienced commercial insurance professionals review your coverage before an unexpected claim puts your business at risk.
Disclaimer: This article is provided for general informational purposes only and is not legal or insurance coverage advice. Coverage depends on the specific terms, conditions, exclusions, and endorsements of each insurance policy. Always consult your insurance agent or carrier regarding your specific operations and driver reporting requirements.
