Liability insurance for a car dealership or garage
In a garage almost everything revolves around other people's cars, and that is precisely the part an ordinary public and employers' liability insurance does not cover. Knowing where the line runs matters more here than the sum insured.
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In brief
The AVB pays for personal injury and damage to third parties' property, but excludes damage caused with or by a motor vehicle. For a garage that cuts away the greater part of the daily risk: the test drive, moving vehicles on the site, collecting and delivering customers' cars and driving under trade plates. That road risk has its own compulsory insurance under Article 2 of the Dutch Motor Insurance Liability Act (WAM) and belongs on a garage insurance, which brings the motor vehicle section and customers' cars together in one policy.
The second boundary is care, custody and control. A car you are repairing, testing, spraying or have in storage is an item in your care. If it burns out, falls off the lift or the paintwork is damaged during sanding, that is excluded on the AVB and you need the section for customers' motor vehicles. The same applies to a bunch of keys in the cabinet: the vehicle still belongs to someone else and remains in your keeping.
What does remain on the AVB is the business around the car. A customer who trips over an air hose in the showroom, a crane that hits something, a leak into next door, or injury to your own engineers. For the latter, the duty of care under Article 7:658 of the Dutch Civil Codeapplies, with concrete themes in this trade: inspection of vehicle lifts, extraction during welding and spraying, handling isocyanates and the new risks of high-voltage systems in electric cars.
This page deals with one situation. The full overview is on Compare public and employers' liability insurance (AVB).
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Business liability insurance (AVB)
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We report the claim and monitor how it is handled. In urgent cases you can reach us on the emergency line.
What to look out for
Four subjects that determine whether a claim is paid in a garage file.
The motor vehicle exclusion is absolute
If an engineer hits a parked car on a test drive, the AVB offers no cover, whoever is at fault. The road risk is reserved to the vehicle's third-party cover or to the motor vehicle section of the motor trade insurance. A customer who takes a demonstration car out themselves also falls under that. In that case record in writing who is driving and what excess applies.
Putting your own repair right is not a loss
If a wheel bolt is not tight or a timing belt is incorrectly tensioned, the consequential damage to the engine and any injury are indeed liability, but redoing your own work is not. Parts, hours and the recovery costs of the failed repair fall under the exclusion for the your own work. That distinction comes back in almost every discussion with a garage.
Soil, oil and coolant
Pollution is limited on the AVB to a sudden, unforeseen event. A wash bay with a leaking oil separator or a tank that has leaked for years is gradual pollution and falls outside the cover. Cleaning up your own site is never liability. There is an for that. environmental damage insurance.
Staff in the workshop
Crushing at a vehicle lift, eye injuries while grinding and long-term exposure in the spray booth are the heaviest claims in this trade. Under Article 7:658 of the Dutch Civil Code you have to show that inspections, personal protective equipment and instruction were in order. If staff drive for work, think about employers' liability cover for road use.
What does your premium depend on?
- Payroll and number of engineers: decisive for the employers' liability section
- Activities in the business: maintenance, accident repair, spraying and LPG weigh differently
- Number of vehicles on the site: storage and customers' cars affect the care, custody and control cover
- Sale of used cars and parts: supplying goods brings liability for the goods supplied
- Fire and prevention measures: the spray booth, charging points and battery storage are looked at separately
- Sum insured and excess: per claim and per insurance year
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | Motor trade insurance |
|---|---|---|
| An employee moves a customer's car on the site and hits your own shopfront in the process | No | Yes |
| A customer's car burns out overnight while in storage with you | No | Yes |
| A customer trips over an air hose in the showroom and breaks a hip | Yes | No |
| A wheel bolt turns out not to have been tightened, the wheel comes off and a collision with injury follows | Yes | No |
| Sparks from an angle grinder set fire to the neighbour's adjoining shed | Yes | No |
| A burst coupling in the wash bay lets water run into the building next door | Yes | No |
As soon as someone else's vehicle is involved, the question almost always shifts to the motor trade insurance.
Frequently asked questions
This is what people ask us most.
Is damage to a customer's car covered on the AVB?
No. A vehicle you have in for repair or in storage is an item in your care and is also a motor vehicle. Both grounds exclude cover. This loss belongs on the customers' motor vehicles section within a motor trade insurance. Without that section you bear the cost yourself of a customer's car that burns out, falls over or is damaged during a test drive.
What if an MOT test misses a defect?
If an accident with injury or damage to someone else's property follows from it, that is liability in tort under Article 6:162 of the Dutch Civil Code. The question is then which policy it falls under: the testing part is usually named separately in the motor trade insurance. The cost of redoing the test itself remains your own performance and is not insured.
Does the AVB cover the sale of a used car with a concealed defect?
A buyer who says they paid too much or seeks rescission is claiming financial loss. That is excluded on the AVB and belongs with the contractual risk you bear yourself. If someone is injured because a part supplied is defective, the product liability under Article 6:185 of the Dutch Civil Code comes into play; see product liability insurance.
What happens if the workshop stands idle after a fire?
Liability is about other people's losses, not about your own lost turnover. If the lift is out of action and you cannot take cars in, you bear those costs yourself unless you have business interruption insurance for garages. In any event report a loss in good time; Article 7:941 of the Dutch Civil Code requires you to do so as soon as you are reasonably aware of it.
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