Repair Garages & Workshops Insurance

Repair garages are among the most insurance-exposed businesses in the motor trade. Every day, you take custody of someone's primary transport asset, work on its critical safety systems, and hand it back with an implicit guarantee that it's roadworthy. When something goes wrong — even through no fault of your own — the expectation is that your insurance will respond.

Customer Vehicles Cover: Your Primary Exposure

The moment a customer's vehicle enters your workshop, you become legally responsible for it as a bailee. Customer vehicles cover (also called bailee's liability or care, custody and control cover) protects you against damage, theft, or destruction of vehicles while in your possession. This includes vehicles awaiting repair, vehicles being worked on, and vehicles ready for collection.

The sum insured should reflect the maximum value of customer vehicles on your premises at any one time — not just your busiest bay, but across all bays, your yard, and any overflow parking. Underinsuring this element is a common error, particularly for workshops that receive high-value vehicles.

Faulty Workmanship and Professional Indemnity

Consumer protection legislation creates significant exposure for mechanical workshops. If a repair you carry out fails — or if a fault you missed causes subsequent damage — the vehicle owner can pursue you for the cost of rectification and any consequential losses. Professional indemnity covers the legal costs of defending these claims and any resulting award or settlement.

Critically, some faulty workmanship claims arise from work carried out months previously. An oil drain plug not properly torqued, a brake calliper incorrectly reassembled, or a wheel nut not tightened to specification may not present as a problem for thousands of kilometres. Professional indemnity covers these late-presenting claims as long as your policy was in force when the claim was made (on a claims-made basis) or when the work was carried out (on an occurrence basis). Understand which basis your policy operates on.

Public Liability and Premises Hazards

Repair workshops are genuinely hazardous environments — oil on concrete floors, vehicles moving in and out, heavy equipment overhead. If a customer visiting to drop off or collect a vehicle slips, trips or is struck by a moving vehicle, your public liability policy responds. Cover at $2 million minimum is standard; $5 million or more is advisable for workshops with regular customer foot traffic.

Road Risk for Road Testing

After completing repairs, you'll typically road test a customer's vehicle to confirm the work. This requires road risk cover — your personal motor policy won't cover you driving a customer's vehicle on business. Third-party-only road risk is the minimum, but comprehensive cover is advisable if you frequently road test higher-value vehicles.

Tools and Workshop Equipment

Diagnostic equipment, scan tools, hoists, air compressors and power tools represent a significant capital investment. These are targets for theft — particularly diagnostic hardware, which commands high resale value. Tools and equipment cover protects against theft, accidental damage, and breakdown of workshop equipment. Keep an itemised register of all workshop assets to support any claim.

WoF Stations and Additional Liability

Workshops with Warrant of Fitness authority carry additional professional exposure. A WoF pass on a vehicle that is subsequently found to have safety defects creates regulatory liability with NZTA in addition to standard professional indemnity exposure. If you operate a WoF station, ensure your insurer is aware — this may require specific wording in your professional indemnity policy.