If you run an auto repair shop, you've probably noticed that business insurance feels like a maze. Should you bundle everything into a Business Owner's Policy? Or buy general liability and property coverage separately? Here's the thing: until July 2025, auto repair shops weren't even eligible for BOPs under standard insurance guidelines. That just changed—and it's opening up new options that could save you money.
Let's cut through the confusion and figure out which approach makes sense for your shop. We'll break down what's actually in a BOP, when standalone policies might be better, and how to know if you've outgrown the bundled option.
What's Actually in a BOP for Auto Repair Shops?
A Business Owner's Policy bundles three core coverages into one package: general liability insurance, commercial property insurance, and business interruption coverage. Think of it as the insurance equivalent of a combo meal—you get multiple protections for less than buying each piece individually.
General liability covers the slip-and-falls that happen in your waiting area, the coffee a customer spills on their laptop while waiting for an oil change, or property damage claims from your business operations. Commercial property protects your building, your lifts, diagnostic equipment, tools, and inventory if they're damaged by fire, theft, or weather. Business interruption steps in when you have to close temporarily—say, after a fire—and covers lost income while you rebuild.
For auto repair shops specifically, the average BOP costs about $147 per month, though Nationwide offers policies starting at $121 monthly. That's a decent deal when you consider that standalone general liability averages $104 per month by itself. Add property coverage on top, and you're easily paying more than the bundled rate.
But here's what a BOP doesn't cover: workers' compensation (required by law in most states), commercial auto insurance for your shop's vehicles, garagekeepers insurance for customer cars in your care, or professional liability. You'll need to buy those separately regardless of whether you choose a BOP or standalone policies.
The Big Change in 2025: Auto Shops Are Finally Eligible
For years, the Insurance Services Office (ISO)—the organization that creates standard insurance forms—classified auto repair shops as too specialized for BOPs. They were steered toward garage policies instead. But ISO noticed something interesting: most claims from auto service businesses weren't actually garage-related. They were slip-and-falls, customer injuries, and general liability issues that any business might face.
So effective July 1, 2025, ISO revised its BOP eligibility rules. Auto repair and service operations can now qualify for BOPs in most states, provided they meet the standard small business criteria: fewer than 100 employees, under $5 million in annual revenue, and primarily low-risk operations. The BOP program now includes auto service-specific endorsements to address unique exposures like non-owned auto liability.
This is a game-changer for smaller shops. If you're a two-bay operation doing brake jobs and oil changes, you can now access the cost savings of bundled coverage. You still need garage liability for road test exposures and garagekeepers for customer vehicles, but the foundation—property, general liability, business interruption—is now available in one simplified package.
When Standalone Policies Make More Sense
BOPs are designed for small businesses with straightforward needs. If your shop doesn't fit that mold, standalone policies or a Commercial Package Policy (CPP) might be better. Here's when that's the case.
First, if you're running a larger operation—multiple locations, more than 100 employees, or over $5 million in revenue—you won't qualify for a BOP. You'll need standalone general liability and commercial property policies, likely packaged together in a CPP that lets you customize coverage limits and endorsements.
Second, if you need highly specialized coverage, a BOP might be too restrictive. Say you do custom fabrication work, restore classic cars, or handle commercial fleet repairs. You might need pollution liability for environmental exposures, inland marine coverage for customer property in transit, or significantly higher property limits for expensive equipment. A CPP offers nearly unlimited customization—you can add crime coverage, umbrella liability, equipment breakdown, and other endorsements that BOPs don't typically include.
Third, consider your growth trajectory. If you're planning to expand rapidly, adding bays, hiring more techs, or opening a second location, you might outgrow BOP eligibility within a year or two. Starting with standalone policies means you won't have to switch carriers or restructure your coverage mid-growth. That continuity can be valuable, especially if you're building claims history with a specific insurer.
That said, for the typical independent shop—one location, a handful of employees, standard repair work—a BOP is hard to beat on price and simplicity. You get bundled coverage, one renewal date, one premium payment, and fewer headaches managing multiple policies.
Cost Comparison: What You'll Actually Pay
Let's talk numbers. The average BOP for a small auto repair shop runs about $147 per month, or roughly $1,764 annually. Some carriers like Nationwide offer rates as low as $121 per month ($1,452 annually), which saves you over $100 monthly compared to the industry average.
If you buy standalone general liability and commercial property separately, general liability alone averages $104 per month for a small business. Add commercial property coverage—which can range from a few hundred to several thousand dollars annually depending on your building value and equipment—and you're likely paying more than a bundled BOP. The $43-per-month difference between standalone GL and a BOP essentially gives you property and business interruption coverage for less than the cost of adding property coverage separately.
But remember: these prices don't include the other coverages you absolutely need. Workers' comp, required in most states, will add anywhere from $500 to $3,000 or more annually depending on your payroll and state rates. Garage liability and garagekeepers insurance—essential for covering customer vehicles and road test exposures—will add another chunk to your premium. You're looking at a total insurance spend of $3,000 to $6,000 or more annually for comprehensive coverage, with the BOP forming the foundation.
The value of a BOP really shows up when something goes wrong. If a fire damages your shop, you're not just looking at property repairs—you're losing income while you rebuild. Business interruption coverage, included in your BOP, steps in to replace that lost revenue. That protection alone can justify the cost difference between standalone policies and a bundled package.
How to Decide What's Right for Your Shop
Start by asking yourself a few questions. Do you have physical assets to protect—a building you own or lease, expensive lifts and diagnostic equipment, inventory of parts? If yes, you need property coverage, which makes a BOP more attractive than standalone general liability alone.
Next, check your eligibility. Are you under 100 employees and $5 million in revenue? Do you operate from a fixed business premises? If so, you qualify for a BOP. If not, you'll need to go the standalone or CPP route regardless.
Think about complexity and customization. If your needs are straightforward—general liability for customer injuries, property coverage for your tools and building, business interruption for temporary closures—a BOP handles all three in one simple policy. But if you need specialized endorsements like pollution liability for hazardous waste handling, cyber liability for customer data, or significantly higher coverage limits, standalone policies or a CPP give you more flexibility.
Finally, talk to an independent insurance agent who works with auto repair shops. They can quote both options—a BOP package and standalone policies—and show you the actual cost difference. Sometimes the BOP wins on price. Other times, especially for larger or specialized shops, a custom-built package makes more sense. Don't guess—get real quotes and compare coverage side by side.
Next Steps: Getting the Coverage You Need
The 2025 rule change means auto repair shops finally have access to the cost savings and simplicity of BOPs. For most small shops, that's great news—you can bundle general liability, property, and business interruption into one affordable package. But if you're running a larger operation, need specialized coverage, or plan to grow fast, standalone policies or a Commercial Package Policy might serve you better.
Don't forget the coverages that aren't included in any BOP: workers' comp, garage liability, and garagekeepers insurance are non-negotiable if you employ techs and work on customer vehicles. Build your insurance program around those essentials, then decide whether a BOP or standalone policies make sense for the foundation. Get quotes from multiple carriers, compare not just price but coverage details, and choose the option that protects your business without overcomplicating your life. Your shop is your livelihood—make sure it's properly covered.
