Workshop Insurance Guide, Australia

The base layer covering third-party bodily injury and property damage arising from your business operations, outside the workshop. A customer slipping in your reception area, a tradesperson knocking over a stand-alone display at a customer site, damage during roadside recovery work. Standard PL excludes property in your care, custody, or control, which is why Customer Vehicle (Policy 5) is mandatory on top.

Typical claim triggers

• Customer slip-and-trip in reception
• Damage to client property during roadside recovery
• Pedestrian injury from a tow operation
• Damage to a neighbouring shopfront from a fire that started in your workshop

Operator note: Fleet, dealer, and insurer panel clients typically require $20M PL minimum. Quote from at least 3 brokers, premiums vary 30%+ between insurers for identical risk profiles. Allianz, CGU, QBE, Vero are the main automotive underwriters.

Compulsory the moment you employ anyone, including casual. Run as a state-managed scheme rather than a private insurer in most jurisdictions. The premium is calculated as a percentage of payroll multiplied by an industry risk loading, vehicle repair sits at the higher end (6% to 10%) due to manual handling, chemical exposure, and equipment risk.

Typical claim triggers

• Tradesperson injury from a hand-tool incident
• Crush injury from a vehicle or hoist incident
• Chemical exposure (paint, solvents, refrigerant)
• Long-term occupational illness (hearing, lower-back, respiratory)

Operator note: icare (NSW), WorkSafe Victoria (VIC), WorkCover Queensland (QLD), ReturnToWorkSA (SA), WorkCover WA, WorkSafe TAS, ACT Insurance Authority, NT WorkSafe. Apply for cover within 14 days of first hire; failure to register is a strict-liability offence with penalties up to $50,000+.

Covers the value of tools and portable equipment against theft, fire, accidental damage in transit, and breakage. Each tradesperson's tool kit is typically $5,000 to $20,000, the workshop's shared tools (diagnostic scanners, hoists, welders, alignment rigs) is much more. A break-in or fire without this cover can be a workshop-ending event.

Typical claim triggers

• Workshop break-in and tool theft
• Vehicle-tool transit damage (mobile mechanic)
• Fire damage to portable equipment
• Accidental damage in transit between sites

Operator note: Schedule each tool above ~$1,000 individually so the policy lists the make / model / serial, speeds claims and avoids depreciation arguments. Annual photo inventory of the workshop pays off the day you have a claim.

Standard commercial motor insurance on workshop-owned vehicles, tow trucks, service utes, courtesy cars, transporter trailers. Different from a personal motor policy because the use is commercial and the vehicle may be carrying customer property (vehicles in tow, tools, parts). Confirm 'business use' is endorsed; consumer policies may exclude.

Typical claim triggers

• Tow-truck collision while uplifting a customer vehicle
• Courtesy car at-fault while loaned to customer
• Service-ute theft while on a callout
• Parts-runner van damage in transit

Operator note: Courtesy cars specifically, confirm the policy covers customer drivers, not just employees. Standard commercial motor often excludes uninsured drivers; you need a 'customer loan' or 'borrowed by client' endorsement.

Critical. The single most-overlooked policy for new workshops. Standard PL explicitly excludes 'property in your care, custody, or control', which is literally every customer vehicle in your workshop at any given moment. A hoist drop, a fire, a roll-away, an apprentice scrape, without CCC cover, the workshop pays from its own funds. With cover, the insurer pays per-vehicle (typically up to $100k to $250k) and aggregate (typically $500k to $2M).

Typical claim triggers

• Hoist drop, vehicle off the lift while elevated
• Roll-away from neutral / brake-off incident
• Apprentice driving error in the yard
• Fire spreading from one customer vehicle to others in the workshop
• Theft of a customer vehicle from the secured yard

Operator note: Per-vehicle limit needs to match the value of vehicles you typically take in, a luxury or performance workshop should have $250k+ per vehicle. Aggregate limit needs to cover a worst-case workshop fire that might affect 10+ vehicles at once.

If you own the building: structural cover for fire, storm, impact, and vandalism. If you lease: the landlord typically insures the structure but you need contents cover for fit-out (compressors, hoists, paint booths, racking, signage, internal partitions, plumbing additions). Fit-out costs are usually owned by the tenant and aren't covered by landlord policies.

Typical claim triggers

• Workshop fire damaging structure / fit-out
• Storm or flood damage
• Hoist or compressor breakdown (with breakdown extension)
• Vandalism / graffiti / forced-entry damage

Operator note: Fit-out replacement is often under-insured. A 4-bay workshop fit-out with hoists, compressors, paint booth, racking, signage is $150k to $500k to replace. Insure for replacement cost (new for old), not indemnity (depreciated).

Parts inventory, tyres, batteries, oils, paints, accessories. Subject to fire, theft, water damage, and contamination. Most workshops carry $20k to $80k of inventory; specialty (tyre, paint, performance) workshops carry significantly more. Stock cover is usually a rider on the premises policy with a declared inventory value.

Typical claim triggers

• Inventory theft from a break-in
• Stock-room fire or water damage
• Refrigerant gas leak / contamination
• Forklift / vehicle impact damage to racked stock

Operator note: Declare the maximum inventory level (peak season carry), not the average. Under-declaration leads to averaging, a 50%-of-value declaration pays 50% of any claim. Photograph the stockroom annually with a date-stamp.

Pays the workshop's ongoing costs (rent, salaries, super, electricity, finance) and lost gross profit during the indemnity period after an insured event closes you. A 12-week closure after a fire while the building is rebuilt is financially devastating without it; with it, the policy keeps the cash-flow alive.

Typical claim triggers

• Workshop closed after fire, 8 to 16 weeks to rebuild + re-equip
• Storm/flood closure
• Equipment breakdown closure (with breakdown extension)
• Loss of access (e.g., council road closure outside the premises)

Operator note: Indemnity period needs to match realistic rebuild time. Standard 12 months is usually OK; for specialty workshops with hard-to-replace fit-out (paint booths, dyno cells) consider 18 to 24 months. Calculate gross profit accurately at policy renewal, under-declared sums-insured = under-paid claims.