Civil liability insurance is not legally mandatory to operate a garage in Quebec, but it is practically essential. Most commercial leases require it. A client whose vehicle is damaged in your shop can sue you for significant amounts. Without insurance, your personal assets are directly exposed. The FPQ 4 coverage (vehicles in care) is essential for every garage owner.

Garage insurance includes several specialized components: the FPQ 4 which covers clients’ vehicles in your care, garage owner civil liability for damage caused during repairs, Completed Operations coverage for claims after vehicle delivery, commercial property insurance for your shop equipment, and environmental liability for oils and solvents.

The FPQ 4 (Quebec Protection Form number 4) covers damage caused to clients’ vehicles that are in your legal care, custody or control. It covers the liability you may incur as a garage owner. The overall limit must be calibrated according to the maximum value of vehicles simultaneously present in your shop and on your premises.

The FPQ 4 covers damage to the client’s vehicle during a test drive performed as part of repairs. Your company’s commercial auto civil liability covers damage caused to third parties. It’s important that test drives are performed by authorized employees and that the distance and route are reasonable — some policies limit the geographic scope of test drives.

Yes, the FPQ 4 covers theft of clients’ vehicles on your premises. The overall coverage limit must account for the maximum value of all vehicles that may be simultaneously present. Security measures — fences, lighting, certified surveillance cameras — may be required by the insurer and may also reduce your premiums.

Yes, under commercial property coverage. The declared value must correspond to the replacement cost as new of all your equipment. A hydraulic lift costs between $8,000 and $35,000, a modern diagnostic device can be worth $20,000 or more. Underinsurance is common in this sector. The machinery breakdown endorsement covers mechanical or electrical failures, distinct from accidental damage.

Insurance generally covers employee actions within the scope of their duties, whether they are certified or not. However, if a job required specific certification and the lack of qualification contributed to a claim, the insurer could invoke this gap to limit or refuse coverage. Keeping your employees up to date in their training also reduces your risk of claims.

As a tenant, you don’t insure the building itself — that’s the owner’s responsibility. However, you must insure your commercial property inside (equipment, inventory), your civil liability, and take out tenant’s liability insurance in case of damage caused to the building (fire, water damage caused by your negligence). Your lease may require minimum insurance limits.

Pollution and environmental contamination are often excluded from standard commercial policies. An environmental liability endorsement or a dedicated policy is necessary to cover soil decontamination costs in case of accidental spills. In Quebec, the Environment Quality Act requires complete decontamination at the operator’s expense — costs that can reach several hundred thousand dollars.

Immediately contact your broker and document all exchanges with the client. Do not acknowledge fault in writing before consulting your insurer. The Completed Operations coverage of your CL policy covers claims arising after vehicle delivery for defects related to your work. Keep your signed work orders, before/after photos and records of parts used — they constitute your defense.