Business Insurance for Auto Repair Workshops: Customer Vehicles and Liability

Auto industrial estates bring together many specialist trades: mechanics, bodywork, paint, auto electrics, upholstery and tyres. Maslak Atatürk Oto Sanayi Sitesi, where our own office is located, is one of the places where such businesses are concentrated. Sharing the same estate with these tradespeople for years has given us a close view of what workshops and garages need from insurance. This guide covers business insurance for auto repair businesses, with a focus on customer vehicles and liability. It is also useful for foreign entrepreneurs who run or are investing in a workshop in Istanbul.

Why a workshop’s risk profile is different

A garage holds flammable materials, electrical equipment, compressed air systems, welding machines and valuable spare parts all at once. On top of that, vehicles belonging to other people are parked inside or in front of the premises. This creates a wide range of risks, from fire and theft to workplace accidents and damage to customer vehicles.

A standard office or shop policy may not fully meet these needs. It is very important to declare the business activity correctly at the quote stage, for example whether there is a paint booth or whether welding is done. Incomplete information can put the claim payment at risk.

The business’s own assets

A workshop’s own assets can be insured under these headings:

• Building or tenant improvements: the building if you own the unit, or your renovation and installation work if you rent it.
• Machinery and equipment: lifts, compressors, wheel balancing and alignment machines, welding and paint equipment. Machinery breakdown cover can pay for sudden and unexpected mechanical and electrical failures, according to the policy terms.
• Stock and spare parts: parts, tyres, oils and consumables in stock.
• Electronic equipment: diagnostic devices, computers and related hardware.
• Fixtures: tool cabinets, hand tools and office furniture.

For theft cover, the workshop’s security, such as shutters, alarms and cameras, can affect the assessment. Also ask whether valuable equipment left in the workshop outside working hours is protected.

Customer vehicles: the most overlooked risk

One of a garage’s biggest responsibilities is the customer vehicles it takes in for repair. A fire in the workshop, a theft, an accident during a test drive or damage caused while working on the car can leave the business facing a serious compensation claim.

A few points are important:

• The stock cover in a standard business policy protects the business’s own goods; it does not automatically cover customer vehicles.
• Liability for vehicles left in your care can be covered by options offered under different names depending on the insurer, such as garage liability or liability for goods in custody.
• Even if the customer’s car has its own kasko (comprehensive motor insurance), the kasko insurer can seek recovery from the garage at fault for the amount it has paid.
• Test drives and taking a car outside the workshop may be subject to separate conditions.

Examining the scope, limits and exclusions of these covers in detail at the quote stage is critical to protecting the business’s financial future.

Employees and third parties

The risk of workplace accidents is more noticeable in auto repair than in many other sectors. Lifting equipment, welding and heavy parts all increase it. Employer’s liability cover protects against claims employees may bring against the employer after a workplace accident; it complements the statutory scheme of SGK, the Social Security Institution. For details, see our guide employer’s liability insurance and why it matters.

Damage suffered by customers visiting the workshop or by neighbouring businesses falls under third-party liability cover. On industrial estates units stand side by side, so the chance of a fire spreading to neighbouring businesses should be considered.

Checklist for workshop owners

1. Declare your activity and the work you do in full.
2. Keep your machinery and equipment list up to date.
3. Review your stock value regularly.
4. Always ask about liability cover for customer vehicles.
5. Keep fire extinguishers and electrical wiring well maintained.
6. Set employer’s and third-party liability limits according to the volume of your business.
7. Keep a record of vehicles taken into the workshop.

A simple check-in routine reduces disputes with both customers and insurers. Recording each vehicle’s mileage and existing scratches and dents with photos on arrival protects the business against later damage claims. Keeping keys in a secure place and leaving vehicles in a closed area or locked at the end of the day lowers theft risk.

On estates with many shared areas, fire safety is a shared responsibility. Regularly removing waste oil and chemicals, checking the electrical installation periodically and keeping extinguishers easy to reach improves safety for you and your neighbours. These measures may be viewed positively by the insurer and help show that you acted with care if a loss occurs.

Finally, compare your policy with the current state of your business at least once a year. If you have bought a new machine, expanded your services or taken on more staff, these changes should be reflected in the policy. Things change quickly in auto repair, and the policy needs to keep pace.

See the options on our business insurance page. As Ailenizin Sigortacısı, from our office at Maslak Atatürk Oto Sanayi Sitesi we compare the needs of local tradespeople with the terms of different insurers. For a quote for your workshop, call +90 530 375 89 61, message us on WhatsApp or drop by our office; we can help in English.