This is the first in a series of 3 posts on the Garage policy. Look for more in the next 2 weeks.

What is the difference between Garage Liability and Garagekeepers Legal Liability? This is another case where the Powers That Be have named two policies in a way that is confusingly similar. See the post on EBL vs EPL vs EL.

A common misconception is that Garagekeepers Legal Liability is a type of policy. Garagekeepers is one coverage that is found within a Garage policy or Auto Dealers policy, the same way Physical Damage is one coverage within the Business Auto policy. The ISO policy itself calls it Garagekeepers, but folks in the industry commonly call it Garagekeepers Legal Liability, or GKLL. You may even see limits requested on an app for “GKLL.”

Garagekeepers is a type of Bailees coverage, for physical damage to autos – or auto equipment, such as engine and body parts – which are left in the insured’s care. The coverage is only for damage the insured must legally pay. For example, the insured is moving a vehicle within the parking lot, hits a pole, and damages a bumper. The insured is legally liable, and Garagekeepers would cover the claim, including loss of use.

So far, GKLL covers only legal liability, where the auto customer must prove the insured was negligent. To maintain goodwill of customers, GKLL can be improved by adding Direct coverage, where the insured is not required to have legal liability. If a customer’s auto is damaged by a hailstorm, Direct coverage with Comprehensive would cover the loss.

There are two types of Direct coverage:
Excess – applies regardless of legal liability, and is excess over other collectible insurance. Most often, that other insurance is the auto owner’s personal auto policy. Direct Excess comes into play if the personal auto policy does not fully cover the damage.
Primary – applies regardless of legal liability, but the coverage is primary. No other collectible insurance will be considered. Primary Direct is the most expansive form, and as you would expect, costs the most premium.

Like Business Auto policies, GKLL uses 3 types of physical damage coverage:

• Collision
• Comprehensive OR Specified Causes of Loss – only one can apply

The Specified Causes of Loss on a Garage policy differs from a Business Auto Policy. See here for SCOL on a Business Auto policy. Look for the post on May 16 for more detail on SCOL coverage on a Garage policy.

GKLL has these exclusions:
Contractual Obligations
Theft by the insured or employees
Defective Parts
Faulty Work
War