- Before opening a safety inspection station, Pennsylvania mechanics must get commercial liability insurance. The insurance must cover up to $50,000 of damages for each service that the station offers. For example, if the station offers oil changes in addition to vehicle inspections, the insurance must cover $100,000 worth of total damages -- $50,000 for inspections and $50,000 for oil changes.
- Insurers must be licensed to practice in the Commonwealth of Pennsylvania. The inspection station can use national insurers as long as they are authorized to underwrite commercial insurance policies in Pennsylvania. They can also use local insurers. However, they cannot use local insurers that do not have the right to underwrite policies in Pennsylvania -- for example, a station cannot use a New Hampshire insurer who is only licensed to work in New Hampshire.
- Commercial liability insurance is mandatory for running an inspection station in Pennsylvania. Not only do applicants have to present proof of insurance when they apply for a license to open a station, but they must renew their insurance every year and must keep it current. If a station owner cancels his insurance or allows it to lapse, he cannot legally operate his station until he reinstates his insurance.
- The purpose of commercial liability insurance is to protect the station owner in the event he accidentally damages a vehicle while servicing it. The insurance covers both exterior and interior damage to the vehicle. For example, if the mechanic accidentally bumps the wall while pulling the vehicle into the garage, his insurance will cover it, just as he will be covered if he breaks something in the vehicle's engine.
Commercial Insurance
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