Does My MA Garage Policy Cover A Boat?

Q: I fix small boat engines and sometimes do fiberglass repairs to boats as well; does my MA Garage Insurance Policy cover me if it is stolen or damaged while the boat is held on my premises?

A: This is a great question. It is not uncommon for garages to repair boat engines or to do fiberglass hull repairs, especially in the heavy use summer months where the season is short and the Marina operations are at their peak.

To answer this, we must turn to the language in the Garage Insurance MA policy. Under the Massachusetts Garage Insurance Policy there exists Garagekeepers Liability coverage. This coverage form is intended to respond to certain Comprehensive and Collision type claims and reads as follows:

We will pay all sums the insured legally must pay as damages for “loss” to a “customer’s auto”… left in the insured’s care while the insured is attending, servicing, repairing, parking or storing it in your “garage operations”…

Since the words “customers auto” and “garage operations” appear in quotes within the policy, this means that these terms are defined within the policy itself and are not left to the reader’s interpretation. Reviewing this language it is apparent that we now need to understand these two definitions before we can answer this question.

“Customer’s Auto” means a customer’s land motor vehicle or trailer or semitrailer. This definition also includes any “customers auto” while left with you for service, repair, storage, parking or safekeeping. Customers include your “employees” and members of their households who pay for services performed.

One might suggest that since the above definition of “Customer’s Auto” specifically includes the word “land”, the drafters of this policy contemplated that a garage may be performing services to boats or even aircraft. It appears they crafted the language specifically to address this question. Clearly from the above definition, the boat would not qualify as a “Customer’s Auto”.

The second definition that may be relevant is whether the coverage could be included as part of the Garage Operations of the insured.

“Garage Operations” means the ownership, maintenance or use of locations for the purpose of selling, servicing, repairing, parking or storing “customer’s autos” and that portion of the roads or other accesses that adjoin these locations. “Garage Operations” also include all operations necessary or incidental to the performance of garage operations.

The drafters of the insurance policy included the term “customers auto’ within the definition of “Garage Operations” and we know that a boat does not meet this definition. Therefore, this definition would also not apply to boats held at or around the insured’s location.

To properly insure the boats, an endorsement would be necessary to change these definitions within the policy or another policy may be needed to cover the exposure. Without it, you would be left to defend a claim, even if it is frivolous, and to pay any judgment or claim.

That’s where an independent agent like Wolpert Insurance can help. We specialize in auto body and repair facilities and our agents have training techniques and systems that can get your program up and running in no time. Visit us today at www.wolpert.com.

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Published in: on October 18, 2010 at 4:57 pm  Leave a Comment  

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