Bought a Garage Door Company? Insurance to Check

A garage door company needs general liability that covers finished work, workers' compensation for installers and technicians, commercial auto for the vans, and property and equipment coverage for the shop, stock and tools. Many owners add an umbrella. Check the finished-work wording first, because a door you installed keeps working under heavy spring tension for years after the crew drives away. This guide is for owners who just bought a garage door company and want to know what should be in force and what to confirm in the first few weeks.

The short answer

Core stack: general liability (including completed operations), workers' compensation, commercial auto, property for the shop and stock, and equipment coverage for tools and doors waiting to be installed.
Finished work is the long tail. Injury or damage from a door or opener can show up months or years after the install, so the wording on completed operations deserves a close read before you compare prices.
The word "garage" misleads. Garage liability and garagekeepers coverage are for businesses that service, park or sell cars. They are not the coverage a garage door company is looking for.
Springs raise the stakes for your crews too. Installers and technicians work around springs under heavy tension, so the workers' comp class, the inherited mod and the payroll records deserve an early look.

Which policies should be in force on day one?

The business is a crew that works inside customers' homes and buildings, drives to a new site every day, and leaves behind a heavy door on a spring. The table matches each exposure to the coverage that usually responds, with what to look for in the wording.

Garage door company exposures and the coverage that usually responds
Exposure	Coverage that usually responds	What to check
A customer, child or visitor is hurt by a door that falls or an opener that fails to reverse	General liability, usually as completed operations	Occurrence form (covers injury that happens during the policy period), limits, and a separate cap for completed work
A door or panel damages a customer's car or home	General liability, subject to its exclusions	Whether the cost of redoing your own work is excluded (it generally is)
An installer or technician is hurt by a spring, panel, ladder or fall	Workers' compensation	Class codes, payroll estimate and whether helpers are on the policy
A van crashes on the way to a job	Commercial auto	Which vehicles and drivers are listed, and coverage if staff use personal vehicles
Fire or storm damage to the shop and stock of doors, springs and openers	Commercial property, plus business income	Replacement cost versus depreciated value, coinsurance (a penalty if you insure too little) and the waiting period before business income starts (72 hours on the standard form)
Tools, doors and operators in transit or waiting at a site	Inland marine, such as an installation floater	Whether tools and installation property are scheduled at all
A severe injury claim above the underlying limits	Commercial umbrella	Which policies it sits over and what customers require

Two lines are judgment calls. Professional liability may matter for sizing mistakes, such as the wrong wind rating or spring for the door weight, though a contractor's general liability policy may already exclude those claims, so ask. Pollution is a minor need, since the hazards are lubricants, cleaners and paint.

Why does coverage for finished work matter so much?

A garage door does not sit still like most finished work. In its Publication 523 (revised April 2011), the U.S. Consumer Product Safety Commission (CPSC) reported that about 73 children aged 2 to 14 were trapped and killed under automatic garage doors between March 1982 and that publication. Those are reports to the agency, not a census, and they span decades of products, so they show the stakes, not a trend. The Door and Access Systems Manufacturers Association (DASMA), a trade group of door makers, says springs, cables and bottom brackets carry extreme tension and should be handled only by trained technicians, which is also the kind of guidance a plaintiff's lawyer could cite after an injury.

On the standard Insurance Services Office (ISO) general liability form (the 12 07 edition), injury or damage to other people and their property after your work is finished can fall under products-completed operations coverage, while the cost of redoing your own faulty work is generally excluded. The coverage gaps guide for garage door companies walks through each exclusion, and the completed operations and products-completed operations aggregate glossary pages explain the limit. Wording varies, so read your own form.

Do the seller's policies still protect you after closing?

Not automatically. A policy's rights and duties generally cannot be transferred without the insurer's written consent, so in an asset purchase the seller's policies usually do not become yours. In a stock purchase the policies stay with the company, but the insurer still needs to know about the change and may reprice at renewal.

Finished work from before closing is the harder question. General liability on an occurrence form is usually triggered by injury or damage during the policy period, whenever the claim is filed. The standard definitions of "your work" and "your product" treat a predecessor differently, so a claim can turn on whether the injury came from the product, the installation or both. Ask your broker to read both definitions against the seller's install history, and see the coverage gaps guide for the wording. See also liability for work the seller did and completed operations claims from the seller's past jobs.

If you borrowed through a Small Business Administration (SBA) 7(a) loan over $50,000, the SBA's rulebook generally requires property insurance on pledged collateral with the lender named, with narrow exceptions. It sets no minimum liability limit, though lenders may ask for more. See SBA lender insurance requirements.

Is a general liability or businessowners policy enough?

Neither is enough alone. A businessowners policy (BOP) packages property, business income and liability for eligible small businesses, but it generally leaves out auto, workers' compensation and professional liability, and eligibility for a garage door contractor depends on the carrier's program rules. General liability also excludes auto liability, injury to your own employees and damage to property in your care, custody or control, which matters when a crew takes away a customer's item. See the general liability page and the commercial auto page.

One naming trap: the garage and garagekeepers page describes coverage for businesses that service, repair, park or sell autos. A garage door company is not that business in the usual case, so do not let a policy that mentions "garage" stand in for the coverage above.

What should you confirm in the first few weeks?

These checks are listed roughly by urgency, and each has a garage door twist.

Workers' comp ownership report. The policy generally requires you to report an ownership change within 90 days. The mod you inherit multiplies your comp premium, so ask for the mod worksheet and the last two audits. Under NCCI rules a recalculated mod can apply back to the date of the change, and some states differ. See workers' comp, payroll and class codes for a garage door company.
Named insured on policies and paperwork. Confirm the legal entity on every policy, and on the work orders, customer contracts and van leases, matches the company you now own. The wrong named insured guide explains the problem.
Newly acquired entity wording. The standard ISO general liability form covers a newly acquired organization automatically until the 90th day after the acquisition (or the end of the policy period, if sooner), but only if you already own a policy, you keep a majority interest and no other similar insurance is available. Other forms use different periods, so read yours. The standard ISO wording leaves out partnerships, joint ventures and limited liability companies (LLCs), so if the company you bought, or the entity you bought it through, is an LLC, do not count on it. It never reaches injury or damage from before the acquisition, a seller's policy that stays in force can defeat the no other insurance condition, and a first-time buyer with no policy has nothing for the wording to attach to.
Vans, tools and drivers. Match the vehicle schedule to the vans and trailers you bought, list who drives, and confirm a tool floater names the winding bars, drills and test gear in them. Heavier trucks can trigger federal motor carrier rules, so ask your broker to check your weights and your state's rules.
Licenses and bonds. Find out who holds the contractor license where one is required and when any bond renews. The contracts, licenses and bonds guide has the detail.
Contract insurance requirements. Compare the insurance exhibit in each builder, property manager and commercial agreement with the policies.

A hypothetical example. A holding company that owns a plumbing business buys a garage door company through a new LLC and assumes its existing liability policy picks up the new company automatically. Three weeks after closing, a technician replaces a torsion spring on a two-car garage. A week later a cable slips and the door drops onto a parked car, causing $8,000 of damage.

Does the plumbing policy treat the new LLC as an insured at all, given the standard wording leaves LLCs out unless they are named? Do the work order and van schedule name the right entity? Redoing the spring is generally the company's own cost. The car damage is the kind of claim liability coverage is meant for, but only if the policy treats the LLC as an insured, so ask the carrier in writing to name the new entity before any add-on closes, and ask now if you have already closed.

The first 90 days guide puts these steps on a calendar. A Morrow review can also compare the declarations pages and endorsements with the business you bought and flag what to ask the carrier. Any new terms depend on underwriting.

What might the seller's program not include?

A seller's program is built for the old owner's contracts and operations, so a new owner may need items it never needed. Picture the doors, springs and openers in the shop and at customer sites, then look for these:

Equipment coverage for tools and for doors and operators waiting at a site. General liability and auto do not cover your own property.
Hired and non-owned auto coverage if technicians use personal vehicles for work. See the hired and non-owned auto glossary page.
Completed operations additional insured wording if a customer contract asks for it. It is usually a separate endorsement from ongoing operations.
Stock limits set from replacement cost, not the deal numbers, because a purchase price is not insurable value. See the commercial property review guide.
An umbrella limit that fits the severity of the work and your contracts.

For cost and broker choices, see what drives insurance cost and the broker guide.

Keep reading

Frequently asked questions

What insurance do I need after buying a garage door company?

Most garage door companies look at general liability with completed operations, workers' compensation if they have employees (state law decides), commercial auto, property for the shop and stock, and equipment coverage. Many owners add an umbrella. Your contracts, lender and state rules decide the list.

Do I need garagekeepers coverage because it is a garage door company?

Usually not. Garage liability and garagekeepers coverage are for businesses that service, park or sell vehicles. Product and completed operations liability for doors and openers sits inside general liability.

Will the seller's general liability cover jobs they did before I bought?

Do not assume so. It depends on deal structure, when the injury happened and the policy wording, including how your work and your product are defined. Ask your broker and deal counsel.

How soon do I have to tell the workers' comp insurer about the sale?

The standard policy generally asks for notice of an ownership change within 90 days. The rating organization then decides how the seller's experience affects your mod.

Does my existing liability policy cover the LLC I bought the garage door company through?

Not automatically. The standard newly acquired organization wording leaves out limited liability companies, so ask the carrier to add the entity as a named insured and get that in writing.

References

Just bought a business? Get your insurance reviewed.

Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.

Request a review Check a contract

Morrow · 25 New Chardon Street, 4th Floor, Boston, MA 02114

This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.

Just Bought a Garage Door Company? What Insurance Do You Need?