Running an auto workshop or working as a mobile mechanic puts you in contact with other people's vehicles, tools worth thousands of dollars, and customers who could slip on a grease patch before you even open the bonnet. Getting the right insurance in place means a bad day does not become a business-ending one.
This guide is general information for NZ businesses, not financial or insurance advice. Cover, limits and exclusions vary between insurers - always read the policy wording and consider talking to a licensed insurance broker or financial adviser before you buy.
Why mechanics need specialist insurance thinking
Most trades businesses need a combination of covers, but mechanics face a specific risk that catches many out: your standard public liability policy often excludes damage to property in your care, custody or control - and a customer's car sitting in your workshop is exactly that. This is one of the most important things to check when you are comparing policies.
ACC handles personal injury to employees and members of the public if they are hurt on your premises or because of your work, but it does not cover property damage, liability claims, your tools and equipment, or your lost income if the workshop has to close. That means you need commercial insurance on top of your ACC levies.
The covers that matter most for mechanics
| Cover | What it protects for a mechanic | Priority |
|---|---|---|
| Public liability | Third-party property damage and injury claims - e.g. a customer slips in the workshop | High |
| Care, custody and control / motor trades liability | Damage to customers' vehicles while in your care | High |
| Faulty workmanship / products liability | Claims arising from a repair that fails or causes further damage | High |
| Tools and equipment | Loss or theft of hand tools, power tools, diagnostic equipment | High |
| Workshop contents | Benches, lifts, computers, stock and consumables inside the building | High |
| Commercial vehicle | Your work van, tow rig or any vehicle used for the business | Medium |
| Building cover | The workshop structure if you own the premises | Medium |
| Business interruption | Lost revenue if a fire or other event forces the workshop to close | Medium |
| Statutory liability | Defence costs and fines if you face prosecution under health and safety legislation | Medium |
| Employers liability | Claims by employees for injury not fully covered by ACC | Medium |
Public liability - and the care, custody and control gap
Public liability insurance covers you if someone is injured or their property is damaged because of your business activities. For a workshop, that covers things like a customer tripping on a hose, slipping on a wet floor, or a visitor being struck by equipment - but the situation with customers' vehicles is more complicated.
Standard public liability policies often exclude damage to property in your care, custody or control. Because a customer's car is entrusted to you for the repair, it is almost always treated as property "in your care." That means a standard policy alone may leave you exposed if you damage the car while working on it - whether that is a dent, a broken component, or a scratch on the paint. Look for a motor trades or garage liability extension, or a specialist mechanic policy, that specifically includes this cover. Always check the exclusions section of the policy wording before you buy.
Faulty workmanship and what happens if a repair causes an accident
If a brake job you completed turns out to be faulty and a collision follows, the property damage claims from third parties could be substantial. Faulty workmanship cover - sometimes listed as defective workmanship or products liability - can respond to these kinds of claims, but the exact wording matters a lot. Some policies cover only the cost of redoing your own work; others cover resulting damage to third parties. Some cover both. Read the policy carefully and ask the insurer or a broker to clarify what is and is not included.
For mobile mechanics the risk is the same, but you have less control over the environment. A loose wheel nut or incorrectly torqued bolt creates the same liability exposure whether you worked in a workshop or a customer's driveway.
Tools and equipment cover
A set of quality hand tools, a diagnostic scanner, an engine hoist, a tyre machine and a vehicle hoist can easily add up to $50,000 or more. Tools insurance covers theft from your workshop, from your van overnight, or while on a job site. Most policies let you list high-value items individually and cover the rest under a general limit.
For mobile mechanics, check whether the policy covers tools left in a locked vehicle overnight - some policies restrict or exclude this. Make sure your sum insured reflects replacement cost rather than depreciated value, or a claim may leave you short.
Workshop contents and building cover
If you rent your premises, contents insurance covers everything inside that is yours - benches, ramps, lifts, computers, oils, lubricants, and any stock. If you own the building, you also need building cover for the structure itself including floors, drainage, and fixed plant.
A workshop fire is a serious risk given flammable liquids, electrical equipment, and hot exhausts. Business interruption cover pays your ongoing fixed costs and lost profit while you are unable to trade, giving you breathing room to reopen without exhausting your personal savings.
Mobile mechanics: extra things to check
Mobile mechanics share the same core insurance needs but have a few additional considerations:
- Your work vehicle is your primary tool storage and your workshop. Make sure your commercial vehicle policy reflects its full value, including any fitted drawer and storage systems.
- You work across different locations - driveways, car parks, roadsides. Your public liability policy should not restrict cover to a fixed premises.
- Some insurers offer a combined mobile tradesperson policy that bundles public liability, tools, and commercial vehicle. Compare these against buying separate policies to see what gives you better value and broader cover.
See business insurance by profession for how insurance needs compare across different trade types.
Is mechanic insurance compulsory in NZ?
There is no blanket legal requirement for mechanics to hold public liability or any other commercial insurance. However, landlords almost always require public liability as a condition of a commercial lease, and some fleet contracts or dealership agreements will also require it. Operating without cover leaves you personally liable for claims that could far exceed the value of your business.
Check business.govt.nz for guidance on general business obligations in NZ. The risks of not having business insurance are real for any trade business, but especially for mechanics who routinely handle expensive vehicles that belong to customers.
Where to get mechanic insurance in NZ
When you are ready to compare options, compare mechanic insurance with BizCover - you can select mechanic as your occupation, get quotes from multiple insurers, and buy online in minutes. For more complex workshop setups, or if you have had claims in the past, a licensed insurance broker can help you tailor cover more precisely.
For a broader view of what is available, see types of business insurance or small business insurance if you are just getting started.
Frequently asked questions
Does public liability cover a customer's car in my workshop?
Not automatically - this is one of the most important things to check. Standard public liability policies typically exclude damage to property in your care, custody or control, which includes a customer's vehicle you are working on. Look for a motor trades or garage liability extension that specifically covers this, and confirm the scope with the insurer or a broker before you buy.
Do mobile mechanics need different cover?
The core covers are similar - public liability, tools, and faulty workmanship - but how they apply differs. You need your commercial vehicle properly insured for business use, your tools covered both in the vehicle and while on site, and your public liability policy to cover work carried out at different locations rather than a single fixed premises. Some insurers offer combined policies for mobile tradespeople that make this easier to manage.
How much is mechanic insurance in NZ?
Premiums vary based on your annual turnover, the value of your tools and equipment, whether you operate a fixed workshop or work mobile, your claims history, and the limits you choose. There is no reliable general figure to quote because the variables are significant. The best approach is to get several quotes with equivalent limits so you can compare like for like - compare mechanic insurance with BizCover to get indicative pricing quickly.
What if a repair I did causes a crash?
If a fault in your workmanship leads to a vehicle accident, you could face claims for third-party property damage. ACC covers personal injury, but vehicle and property damage falls outside ACC. Faulty workmanship or products liability cover - where it is included in your policy - is designed to respond to these situations. Check that your policy actually includes this before you rely on it, as not all standard public liability policies do.
Does ACC replace the need for mechanic insurance?
No. ACC covers personal injury to people - employees, customers, and bystanders - but it does not cover property damage, damage to customers' vehicles, your own tools and equipment, your lost business income, or liability claims generally. You need commercial insurance alongside your ACC levies to be properly protected as a mechanic business.