Mechanic Insurance: What It Actually Covers and What It Costs

August 23, 2026 3 Min Read

Mechanic insurance isn’t one policy. It’s a bundle of covers. People mix them up a lot. Here’s what each cover does. Here’s what it costs, for a shop and for a mobile mechanic. Here’s which parts you can’t skip.

Quick Answer: Mechanic Insurance

Mechanic insurance is business cover for repair work on cars. It usually bundles four things. Public Liability, Garage Keeper’s cover, Tools cover, and sometimes Professional Indemnity. Public Liability covers injury or damage to someone else. Garage Keeper’s cover is different. It covers damage to a customer’s car while it sits in your care. Most mechanics need both, not just one. A sole mobile mechanic typically pays $1,200 to $3,500 a year. A small workshop with staff usually pays more. That’s because workers comp gets added to the mix.

Public Liability vs Garage Keeper’s Liability

People mix these up a lot, but they cover different things. Public Liability protects you if someone gets hurt, or their stuff gets damaged, because of your work.
Garage Keeper’s Liability covers a narrower risk. It protects the customer’s own car while it’s parked in your workshop, or sitting on your mobile rig.
Say you drop a tool and it dents a customer’s bonnet. That’s Garage Keeper’s cover. Now say a customer trips over your air hose. That’s Public Liability instead.
Most mechanics need both covers, not just one. A policy with only Public Liability leaves the cars you work on with no cover at all, while they sit in your care.

What Else Gets Bundled In

Tools cover. This protects the gear you use every day. Shop or on the road. It covers theft and damage.
Advice cover, for advice-heavy work. This matters if you sign off on roadworthy checks, or give advice a customer later relies on.
Workers comp, once you hire staff. This isn’t optional in any state, once you take on staff. It doesn’t matter what trade you’re in.
Property cover, for a fixed shop. This protects the building, the fittings, and the stock. Not just your tools. Fire, theft, and storm damage too.

What It Actually Costs

A sole mobile mechanic typically pays $1,200 to $3,500 a year. That figure usually bundles Public Liability, Tools cover, and sometimes Professional Indemnity together.
Public Liability alone often runs $600 to $1,800 a year. The number depends a lot on your cover limit. That’s usually $10 million or $20 million.
A fixed workshop with staff typically costs more overall. Workers Comp and property cover both get added. Neither one is optional once you take on staff.
Your claims history moves the price more than almost anything. A clean record over several years can shift your premium a lot. A business with recent claims pays more.

Mobile Mechanic vs Fixed Workshop: What Changes

A mobile mechanic’s biggest risk is the car itself, mid-repair, at someone else’s property. Garage Keeper’s cover and Tools cover both matter more here than property cover does.
A fixed workshop adds property risk on top of everything else. Fire, theft, and storm damage to the building are real risks. A mobile setup just doesn’t carry them.
Staff numbers change things for both setups. The moment either one hires even a single worker, Workers Compensation becomes compulsory. It’s not optional.
Ask your broker to price it both ways if you’re not sure. Being clear about mobile-only work versus workshop work changes which covers actually matter for you.

FAQ: Mechanic Insurance

Is mechanic insurance one policy or several bundled together?
It’s usually several covers bundled into one package. Most commonly Public Liability, Garage Keeper’s Liability, and Tools and Equipment cover.

What’s the difference between Public Liability and Garage Keeper’s Liability?
Public Liability covers injury or damage to other people. Garage Keeper’s Liability covers a customer’s car while it’s in your care for repair.

How much does mechanic insurance cost for a sole trader?
A sole mobile mechanic typically pays $1,200 to $3,500 a year. It depends on your liability limit, your claims history, and which covers you pick.

Do I legally need mechanic insurance in Australia?
Public Liability isn’t legally compulsory. Workers Comp is, in every state, the moment you hire staff. Most mechanics carry Public Liability anyway. An uninsured claim can get expensive fast.

Do mobile mechanics need different cover than a workshop?
The core covers overlap. But a workshop adds property risk a mobile setup doesn’t carry. A mobile mechanic leans more on Garage Keeper’s and Tools cover instead.