Garage Operations???

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Garage Operations???

Postby P&C I Agent of IL » Wed Sep 16, 2009 9:01 am

What is the difference between mechanics E&O vs Completed Products & Operations? Where is the gap that needs to be filled? I am 6 weeks young, please advise- Thanks in advance for all your input.
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Re: Garage Operations???

Postby new2independent » Wed Sep 16, 2009 10:33 am

I am not sure if a standard auto garage would need coverage for E&O. I work and prospect for auto garages and have never seen nor suggested E&O. I would contact one of your carrier for confirmation but I do not usually see a professional exposure. Professional liability is usually for professional industries. Such as a lawyer, accountant, printer/publisher or insurance agent. I am also fairly young in the business and would appreciate if someone else had input.
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Re: Garage Operations???

Postby P&C I Agent of IL » Wed Sep 16, 2009 10:48 am

The way I understand it is that if a mechanic is working on a car servicing a timing belt and does not install that belt properly and engine damage results in the bay- this, typically, is not covered under completed products and operations as this loss did not occur "away" from premises. I am waiting for my underwriters to get back to me to confirm, I was hoping someone else had seen this too.
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Re: Garage Operations???

Postby NDA » Wed Sep 16, 2009 12:51 pm

Actually there is no products-completed operations as a separate coverage in the ISO garage policy. The exclusion that prevents coverage for the described loss is contained in Exclusion 6.d. which excludes dame to property in the "insured's" care, custody or control.

However, if the insured has Garagkeepers coverage with comprehensive coverage then that coverage would normally apply subject to two exclusions, one for defective parts and one for faulty work (meaning that the policy won't pay for the defective part and/or the actual faulty work, but will pay for the resulting damage).
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Re: Garage Operations???

Postby s&fnorth » Wed Sep 16, 2009 1:02 pm

My understanding is that Mechanics E&O covers damage to "your work" which is excluded in ISO garage policy. An example would be a shop replacing a tire and leaving the wheel loose. The damage resulting from the crash after the wheel fell off is covered by the Products Liability but the damage to the tire (your work) is not. In NY Zurich makes a big deal about having the coverage but I haven't read a Zurich policy in a while to be certain what is covered and what is excluded. Get ready for a good course in how misunderstood garage coverages are and good luck!
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Re: Garage Operations???

Postby smorris » Thu Sep 17, 2009 11:31 am

While I haven't seen a Mechanics E&O policy, typically E&O covers 3rd Party Financial Loss where GL covers Bodily Injury or Property Damage.
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