How much does insurance cost for an auto repair shop?

Two policies that sound alike: liability and garagekeepers

A repair shop carries two kinds of liability that a standard general liability policy does not treat the same way. General liability answers for injury to a customer on your premises or damage to someone else’s property caused by your work. Damage to the customer’s own car while it is in your bay, on your lot or on a test drive is a different exposure, and shops buy a separate cover for it: garagekeepers⁠⁸.

ERGO NEXT’s own auto repair product shows the split. Garagekeepers liability is “included with general liability in Pro and Pro Plus packages”. NEXT’s example is a head mechanic who drives a customer’s car into a concrete post and dents the trunk. Garagekeepers “would help to cover the repairs to the body of the car”⁠⁸. The company lists dents and scratches, vandalism, and fire or extreme weather as the losses it is meant to pay⁠⁸.

Scroll the table sideways to see every column.

Source: ERGO NEXT⁠⁸. These are one insurer’s product limits, not a market standard.

Three points follow from the table:

• The Basic package has no garagekeepers. A shop that buys the cheapest NEXT package has no cover for a customer’s car in its care⁠⁸.
• The garagekeepers limit is a fraction of the GL limit. At $50,000 or $100,000 per occurrence, it is sized for a fender or a fire, not for a lot full of customer vehicles. A shop that stores more cars overnight than the limit would cover needs to ask its insurer how the limit applies per vehicle and per loss.
• Faulty work is a third line. NEXT describes it as cover for redoing a job that was not up to par and for defense costs when a customer says a transmission fails after service⁠⁸. GL is not written for this kind of claim.

What insurers publish for auto repair

Two figures exist, both from ERGO NEXT and both averages over customers who bought in the previous 12 months:

Insurer- and broker-reported figures from each company’s own customers, as published on its website; not a random sample of all businesses. Figures are rounded as published.

In annual terms these are $2,640 for GL and $1,584 for comp (our calculation, 12 × the monthly figure)⁠⁶⁠⁷. The comp page’s disclosure refers to commercial property buyers, apparently a copy error, so read the comp number as indicative only⁠⁷. A one-bay mechanic and a ten-technician shop are inside the same average. No other insurer in our data publishes a figure for auto repair.

Workers’ comp: what the official schedules say

Repair shops are classed by what the shop does. A shop that fixes engines, one that does collision work, and one that also sells cars land in different classes, and a few states pool them. Ohio, Washington and Wyoming publish the rate itself:

Base rates set by the state fund before experience modification. Ohio and Wyoming charge per $100 of payroll; Washington charges per hour worked, and part is withheld from wages. Other states’ insurers file their own rates; see where rates are published.

What the schedules show:

• Ohio. Class 8380, “Automobile – Service or Repair Center & Drivers”, is $1.3523 per $100. Clerical class 8810 is $0.0466, so a mechanic’s payroll costs 29 times as much as office payroll (our calculation)⁠¹. Body repair, class 8393, is $0.8428, about 62% of 8380 (our calculation), even though many people would expect collision work to be the riskier trade⁠¹. If your shop does both, the classification decides which payroll goes where.
• Washington. Class 3411, “Automobile Dealers, Rentals and Service Shops”, is $1.2681 per hour in 2026, and 3412, “Body and Fender Repair Shops”, is $1.64. Washington charges per hour worked, so a master technician and an apprentice cost the same to insure⁠².
• Wyoming. The schedule has one line, 811100 “Automotive Repair & Maintenance”, at $1.69 per $100⁠³. Repair and maintenance (NAICS 811) is on the list of extrahazardous employment for which coverage is compulsory⁠⁴; the department itself sets the rates in the state’s workers’ compensation account (W.S. 27-14-201)⁠³⁠⁴. We did not find a class 811111 in the 2026 schedule.

In most other states, private insurers file their own rates on top of bureau loss costs. The class code is the same, but the rate per $100 differs by insurer and state. See workers’ comp class codes.

BLS cost per hour

The BLS does not publish an auto repair figure. Its closest group, “Other services (except public administration)”, had workers’ comp costs of $0.35 per hour worked in June 2026, 0.9% of compensation, against $0.43 for all private industry. The group averages repair with salons and similar services⁠⁵.

Average employer cost per employee hour worked for workers' compensation and for health insurance, averaged across all workers in the group, plus workers' compensation as a percent of total compensation. Group averages mix high- and low-risk jobs, so they are not a premium rate for any single business. U.S. Bureau of Labor Statistics (BLS), National Compensation Survey, June 2026 (2026 Q2), private industry workers, released 9 Sep 2026.

Worked examples

These are our calculations with stated assumptions, using official 2026 rates. They are not quotes.

1. Ohio, $400,000 payroll in class 8380

   $400,000 ÷ 100 × $1.3523 = $5,409.20 a year at the base rate, before experience modification⁠¹.

2. Washington, five technicians at 1,800 hours each in class 3412

   9,000 hours × $1.64 = $14,760 a year. In class 3411 the same hours cost $11,412.90⁠².

3. Wyoming, $400,000 payroll

   $400,000 ÷ 100 × $1.69 = $6,760 before the employer’s experience factor⁠³.

Vehicles, equipment and the building

• Shop-owned vehicles. Tow trucks, shuttles and loaner cars are commercial auto exposures. Driving a customer’s car on a test drive falls under the garagekeepers conversation above, not a standard business auto policy. See commercial auto and, for employees using their own cars to pick up parts, hired and non-owned auto.
• Tools and diagnostic equipment. Lifts, scan tools and alignment racks are your property. ERGO NEXT’s packages list commercial property at $300,000 per occurrence⁠⁸. Portable equipment is usually insured on a floater; see inland marine.
• The building. If you own or lease the bay, see commercial property.

Building an auto repair budget

No published figure gives a repair shop’s total cost. To build one you can check against quotes:

1. Split payroll by class

   Technicians, body workers, counter staff and office staff. In Washington, track hours.

2. Apply the official rate where one exists

   Ohio, Washington and Wyoming above; elsewhere, ask which class and rate the insurer used and your experience mod.

3. Decide the garagekeepers limit from your lot

   Count the vehicles you may hold at once, and compare it to the per-occurrence limit.

4. Price GL on the same payroll or receipts

   Ask each insurer which exposure base it used.

5. Add vehicles and equipment separately

The premium calculation guide explains each step, and the workers’ comp estimator runs the comp arithmetic with official rates.

Sources

1. 1
   Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-06, Appendix A: base rates effective July 1, 2026 (private employers) Checked 13 Oct 2026 · Back to text ↑
2. 2
   Washington State Department of Labor & Industries, 2026 hourly rates by risk classification Checked 13 Oct 2026 · Back to text ↑
3. 3
   Wyoming Department of Workforce Services, Workers' compensation 2026 industry base rates by classification Checked 13 Oct 2026 · Back to text ↑
4. 4
   Wyoming Legislature, Wyoming Statutes title 27, W.S. 27-14-108 (extrahazardous employment) Checked 13 Oct 2026 · Back to text ↑
5. 5
   U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026 (released Sept. 9, 2026) Checked 13 Oct 2026 · Back to text ↑
6. 6
   ERGO NEXT, How much does general liability insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
7. 7
   ERGO NEXT, How much does workers' comp insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
8. 8
   ERGO NEXT, Auto repair shop insurance Checked 13 Oct 2026 · Back to text ↑

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