Garage Operations???

Your response to industry hot topics.

Moderators: Josh, independent guy

Post Reply
P&C I Agent of IL
Insurance Journal Enthusiast
Posts: 8
Joined: Thu Jul 30, 2009 9:57 am

Garage Operations???

Post by P&C I Agent of IL »

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.
new2independent
Insurance Journal Addict
Posts: 33
Joined: Fri Nov 21, 2008 4:20 pm

Re: Garage Operations???

Post by new2independent »

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.
P&C I Agent of IL
Insurance Journal Enthusiast
Posts: 8
Joined: Thu Jul 30, 2009 9:57 am

Re: Garage Operations???

Post by P&C I Agent of IL »

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.
NDA
Insurance Journal Fan
Posts: 6
Joined: Thu Dec 20, 2007 12:22 pm
Location: Stockton, CA
Contact:

Re: Garage Operations???

Post by NDA »

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).
s&fnorth
Insurance Journal Fan
Posts: 1
Joined: Wed Sep 16, 2009 12:48 pm

Re: Garage Operations???

Post by s&fnorth »

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!
smorris
Insurance Journal Fan
Posts: 2
Joined: Tue Jun 02, 2009 10:30 am

Re: Garage Operations???

Post by smorris »

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.
christinab
Insurance Journal Fan
Posts: 3
Joined: Tue Mar 06, 2018 9:42 am

Re: Garage Operations???

Post by christinab »

Has anyone found a solution to this exposure? It should be a mechanics E&O endorsement but it doesn't seem to be a popular endorsement with most insurers. A few companies claim to be covered in these instances but I have yet to see a policy acknowledging coverage to this instance. Please let me know if anything has been found!
Post Reply