Clients coming into your auto repair shop rely on you to make their vehicles safe and roadworthy. Sometimes, unintentional mistakes happen and things go wrong. These can lead to serious liability issues. From lawsuits and insurance claims to reputational damage and financial loss. As an auto shop owner, it is a good practice to understand liability. You will need it to protect your business, staff, and customers from any unforeseen circumstances.
Is a mechanic responsible for damage from repairs?
In one word, yes. Mechanics and repair shop owners have a legal obligation when performing repairs. This is called ‘duty of care’. This means that services have to meet a reasonable standard that is expected from a professional in the same field. If the repair job does not match that standard and results in damage, injury, or loss, the shop and the mechanic are legally liable.
As per the law, the vehicle in your auto shop is not only a job. It is an ‘entrusted property’. While it is on your shop’s property and under your care, you have a responsibility to protect it from damage, misuse, theft, or loss. Learn about your legal exposure to avoid
- Expensive lawsuits and settlements
- Insurance premium hikes
- Reputation loss in the community
- Investigations by the regulatory authority
- License revocation
Key legal terms every shop must know
Duty of care
This is a mechanic’s obligation to uphold the standards of a professional when carrying out repair and maintenance services.
Negligence
It is the inability to exercise proper care that can cause damage or harm. This is also the most common basis for liability claims.
Unauthorized repairs
If the customer hasn’t pre-approved a service, it will be a breach of customer protection laws.
Breach of contract
This is when the agreed services are not delivered, or when there’s a lack of quality.
Bailment
This is a legal relationship between the repair shop (bailee) and the customer (bailor). The bailee has to protect the bailor’s property.
Conversion
If the auto shop or mechanic keeps the customer’s property for their own benefit.
Deceptive trade practice
Mechanic misrepresents the repairs needed and gives false information about repairs, costs, or warranties.
Examples of mechanic liability triggers
1. Damage during repairs
While carrying out the repairs, there may be some damage caused by the technician. For example,
- An accidental scratch on the vehicle when removing the bumper
- Backing another vehicle into the customer’s car
- Parts of the engine are dropped, causing internal damage
- Mishandling of the battery, which damages the hood
2. Faulty repairs
If the repairs aren’t up to professional standards and haven’t been given the proper ‘duty of care’, they might lead to accidents. A few examples of bad repairs
- Wrongly installed brake pads can cause a crash
- The wrong filter or insufficient oil during an oil change can cause engine seizure
- Wheels fall off if lug nuts aren’t torqued correctly
If any of this happens, the burden of proof is on the shop. This means they have to prove that the shop followed all industry standards. Otherwise, the shop will face legal consequences.
3. Extra or unauthorized work
This is when your mechanic is carrying out services that are not pre-approved by the client and is charging them for it. For example,
- Performing a transmission flush without authorization and charging the client $250
- Adding brake pad replacement to the final invoice without prior consultation.
- Charging them for extended labor or diagnostic fees without adding them to the original estimates.
It is always a good practice to stick to the original estimate and list of services. Plus, use the signed repair authorizations. Anything additional must be approved by the client. Otherwise, your shop can be sued under the customer fraud or deceptive practices law.
4. Theft or vandalism while the vehicle is in the shop
For example, when the vehicle is in the auto shop, there could be
- Theft of a stereo system or personal belongings
- Vandalism when parked in an unmonitored area
- Duplication of key fobs that are later used to access the vehicle
These are serious security concerns that can damage your shop’s reputation in the long run. Take precautions, install cameras and an alarm system, lock gates, and pay attention to security. Also, highlight all your security measures to your customers.
5. Wrong storage and environmental damage
If your auto shop fails to properly store the vehicle, or if there is damage caused by floods or hailstorms because the vehicle wasn’t safely stored, there is clear negligence on the part of the shop owner. Negligence here means poor storage planning. For example
- The vehicle was damaged during a hailstorm because it was left outside
- Poor drainage in the shop causes floods, which damage vehicles
- Paint damage due to chemicals in the shop environment.
What to do if your technician damages a vehicle while repairing it?
In the event, the technician damages a vehicle while repairing it, how will you respond to the situation? It’s more than just fixing the vehicle. It’s about maintaining trust and customer relationships.
Here’s a response framework you can follow:
1. Acknowledge the problem
The first step is recognizing what happened and collecting any evidence. Don’t minimize the damage or deny it. Acknowledge it. Document everything. That should be a general practice while servicing vehicles always. Take photos, record technician notes, and add timestamped surveillance footage.
2. Inspect the vehicle again
Get a senior technician on board to inspect the vehicle. You can also invite a third-party evaluator to assess the damage. This will give customers a transparent and clear evaluation.
3. Give a solution
The next step in resolving the issue is compensation. Offer a refund. Ask them to redo the repair again at no cost. Or pay for damage correction.
In case they want a rental car, offer coverage for that. Document the resolution as well. Have them sign this so all parties know the terms of the agreement.
4. Get your liability insurance carrier on board
Submit your claim with all supporting documents. Make it as detailed as you can, covering all aspects. Corporate with the adjuster’s evaluation.
5. Follow up with your customer
Call within 1-2 days of the resolution. See if they are happy with it. As a goodwill gesture, offer a discount on future services. This will help maintain a positive relationship despite the damage.
Rule of thumb: document all your discussions, agreements, and discussions. Keep a record of all texts and emails. Make sure all estimates are signed by customers.
What can shop owners do to avoid this?
As a shop owner, you can carry out a few preventive measures. These can help you reduce liability and build customer trust. Here are eight proven tactics to avoid any problems with customers:
1. Record all estimates and have them signed
Write all your estimates and get them signed by your customers. Include diagnostics in these written estimates. If you’re adding any additional jobs, create new authorizations. Use an auto repair shop software to create digital estimates in minutes.
2. Create detailed checklists and reports
Have detailed checklists and standardized forms in place. Also, create detailed pre- and post-inspection reports where you log in any scratches and dents before your technician starts work.
3. Verify employee training and qualifications
Your employees must uphold certain qualification standards. Make sure they have all the required certifications, such as ASE. You can also provide ongoing education and training. Introduce them to new technologies so they stay updated.
4. Only use OEM or certified parts
Tell your customer if you’re using aftermarket parts. Keep clear documents that show customer approvals for part types. Communicate the difference between OEM and aftermarket parts so there’s no confusion later on.
5. Keep a photo/video repository for proof
Take pictures of the vehicle’s exterior, dashboard, odometer, and affected areas. Add timestamps and keep these in your customer records. Also present these while giving estimates so there’s visual proof of what you’re working with.
6. Have strong shop liability insurance in place
Review your liability policies annually. Make sure these are all up to date. They should include customer vehicle coverage, fire/theft, and errors and omissions.
7. Give disclaimers and keep communication open
Display signage clearly that explains your warranty limits. Explain your storage policy as well. Keep transparent customer communications. Tell them about repair timelines and possible complications.
Lastly, it is always a good practice to create a culture of accountability. Ask your technicians to report any issues as soon as they find them. Quality control should be a part of your process.
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Wrapping up
Auto repair liability is a real, frequent business risk. Create proactive systems. Make sure your staff is legally aware. Your shop must have a culture of transparency. If they know about ‘duty of care’ and ‘negligence’, they can protect their reputation and the shop’s profitability.
Here’s what you can do right now:
- Review your authorization process
- Conduct a liability training session
- Make sure your insurance policy covers negligence and theft
- Tighten up your internal processes and make sure all your staff are up to date
FAQs
Can a customer sue a mechanic for bad repairs?
Yes, a customer can sue a mechanic for poor repairs if the repairs don’t meet a reasonable standard or lead to further damage and safety concerns.
What legal responsibilities do auto repair shops have?
Auto repair shops have a legal responsibility to keep the customer’s vehicle safe, deliver the promised services, and maintain professional repair standards.
What should a shop do if a mechanic damages a customer’s vehicle?
The shop should acknowledge the damages, document everything from the beginning, bring a senior tech or third-party evaluator to assess damages, and offer a resolution.
How can auto shops protect themselves from liability claims?
Auto shops can protect themselves from liability claims by using signed estimates and authorizations, maintaining documentation, training staff, clearly communicating policies, and investing in liability insurance.
