If you run an auto repair shop, you know insurance can get expensive fast. Between protecting your building, your equipment, and defending yourself against liability claims, the costs add up. That's where a Business Owners Policy (BOP) comes in. Think of it as a bundle deal for insurance—you get general liability and commercial property coverage in one package, usually for 10-15% less than buying them separately.
But here's the thing: a BOP isn't right for every auto repair business. There are revenue limits, coverage gaps you need to know about, and additional policies you'll likely need. Let's break down when a BOP makes sense for your shop and what it actually covers.
What's Actually Included in a BOP?
A Business Owners Policy combines three essential coverages into one policy. First, you get general liability insurance, which protects you if a customer slips on your shop floor and breaks their wrist, or if you accidentally damage someone's property. This covers medical bills, legal fees, and settlements if you're sued.
Second, commercial property insurance covers your building (if you own it), equipment, tools, and inventory. If a fire destroys your diagnostic computers, lifts, and parts inventory, this coverage pays to replace them. It also protects against theft, vandalism, and certain weather events.
Third—and this is the part many shop owners miss—business interruption coverage. Let's say a storm damages your shop and you can't operate for two months while repairs happen. Business interruption insurance replaces your lost income and covers ongoing expenses like payroll, rent, and loan payments. Without this, you're out of business income while still paying your bills.
Does Your Auto Repair Shop Qualify?
Not every auto repair business can get a BOP. Insurance companies have specific eligibility requirements. The main one: your shop needs to generate less than $1 million in annual revenue. If you're pulling in more than that, you'll need to buy general liability and commercial property as separate policies.
You also need fewer than 100 employees. Most independent shops and small chains clear this hurdle easily. The logic here is simple: BOPs are designed for small to medium-sized businesses. Larger operations have different risk profiles and need customized coverage.
One more thing to watch: the business interruption component typically covers less than one year of lost income. If you think you'd need more time to rebuild after a catastrophic loss, you might need additional coverage.
What a BOP Doesn't Cover (And Why That Matters)
Here's where auto repair shops get tripped up. A BOP does not include garage keepers liability insurance—and that's a critical gap. Garage keepers coverage protects customers' vehicles while they're in your care. If a customer's car is damaged by fire, theft, vandalism, or collision while you have it, garage keepers insurance pays for repairs.
Without garage keepers coverage, you're personally liable for damage to vehicles in your possession. That's a dealbreaker for most auto repair shops. The good news: you can add garage keepers liability as an endorsement or buy it separately. Most shops carry $50,000 to $250,000 per vehicle, with higher limits if you work on luxury cars or EVs.
A BOP also doesn't cover commercial vehicles your business owns. If you have a tow truck or service van, you need commercial auto insurance separately. And if you employ technicians, you'll need workers' compensation insurance—that's legally required in most states and covers medical costs and lost wages if an employee gets hurt on the job.
How Much Does a BOP Cost for Auto Repair Shops?
For auto repair businesses, a BOP averages about $223 per month or $2,675 annually in 2026. But that's just an average—your actual cost depends on your location, revenue, claims history, and the value of your equipment.
State makes a big difference. Shops in North Dakota might pay as little as $190 monthly, while Louisiana shops can hit $263. Provider matters too. Nationwide offers some of the cheapest rates at around $121 per month, while other major carriers like The Hartford and Coverdash come in around $167-$168 monthly.
Why do auto repair shops pay more than, say, a consulting firm? Risk factors. You're operating specialized equipment like hydraulic lifts and alignment machines. You handle hazardous materials—motor oil, brake fluid, refrigerants. You employ skilled technicians working with expensive tools. And there's always liability exposure from vehicle repairs. All of this drives up premiums compared to lower-risk businesses.
If you bundle your BOP with workers' comp and professional liability, you're looking at around $457 per month or $5,492 yearly for comprehensive coverage. That's still cheaper than buying each policy separately.
How to Get Started with a BOP
If your auto repair shop qualifies—under $1 million in revenue, fewer than 100 employees—start by getting quotes from multiple providers. Don't just look at price. Compare coverage limits, deductibles, and what's included. Some BOPs have better business interruption coverage than others. Some make it easier to add garage keepers liability.
When you talk to insurers, have this information ready: your annual revenue, number of employees, square footage of your shop, value of equipment and inventory, and claims history for the past five years. This speeds up the quote process and gets you more accurate pricing.
Once you have a BOP, make sure you add the critical coverages it doesn't include: garage keepers liability, commercial auto (if you own vehicles), and workers' compensation (if you have employees). Your insurance agent can bundle these onto your policy or write separate policies. Either way, get it in writing and review your coverage annually. As your business grows, your insurance needs change.
A Business Owners Policy is a smart, cost-effective choice for small to medium-sized auto repair shops. It simplifies your insurance, saves you money, and covers the big risks—property damage, liability claims, and lost income. Just remember: a BOP is a foundation, not a complete solution. Pair it with garage keepers coverage and other essential policies to fully protect your business.
