Liability insurance is not legally required to operate a garage in Quebec, but it is practically unavoidable. 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. FPQ 4 coverage (vehicles in custody) is essential for any mechanic shop.

Mechanic shop insurance includes several specialized components: FPQ 4 which covers client vehicles under your custody, mechanic liability for damage caused during repairs, Completed Operations coverage for claims after vehicle delivery, business property insurance for your workshop equipment, and environmental liability for oils and solvents.

FPQ 4 (Quebec Protection Form number 4) covers damage to client vehicles that are under your legal custody, in your care or control. It covers the liability you may incur as a mechanic. The aggregate limit should be calibrated according to the maximum value of vehicles present simultaneously in your shop and on your premises.

FPQ 4 covers damage to the client’s vehicle during a test drive performed as part of repairs. Your business commercial auto liability covers damage caused to third parties. It is 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, FPQ 4 covers theft of client vehicles on your premises. The aggregate limit of coverage must account for the maximum value of all vehicles that may be present simultaneously. Security measures — fencing, lighting, certified surveillance cameras — may be required by the insurer and can also reduce your premiums.

Yes, under business property coverage. The declared value must correspond to the replacement cost 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. Under-insurance is common in this sector. Equipment breakdown endorsement covers mechanical or electrical failures, distinct from accidental damage.

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

As a tenant, you do not insure the building itself — that is the owner’s responsibility. However, you must insure your business property inside (equipment, inventory), your liability, and obtain tenant liability insurance for 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 dedicated policy is necessary to cover soil decontamination costs in case of accidental spills. In Quebec, the Environmental Quality Act requires complete decontamination at the operator’s expense — costs that can reach several hundred thousand dollars.

Contact your broker immediately and document all exchanges with the client. Do not admit fault in writing before consulting your insurer. The Completed Operations coverage of your liability policy covers claims occurring after vehicle delivery for defects related to your work. Keep signed work orders, before/after photos, and parts inventory records — they constitute your defense.