If a mechanic fails to tighten a lug nut, which coverage of the dealer's garage policy will address the damage to the engine?

The correct answer pertains to the coverage known as "Garage operations - other than covered autos." This type of coverage is designed to provide protection in situations where mechanical errors or negligent actions by the garage staff lead to property damage. In this scenario, if the mechanic's failure to tighten a lug nut results in damage to the engine, this coverage would apply as it addresses liabilities arising from services performed on customers' vehicles that are typically not considered "covered autos."

This coverage is crucial for any garage operation, as it safeguards against the inherent risks of negligent maintenance or repair work that could lead to significant financial loss for the dealership. By having this coverage in place, the dealer can be protected against claims that arise from damages that occur during the service of vehicles, even if those vehicles are not themselves covered under the regular auto insurance policy.

The other options do not apply in the same context: garage operations related to covered autos are specifically about the vehicles insured under the policy, while auto liability pertains to damage or injury caused to third parties due to the operation of a vehicle. Comprehensive coverage typically addresses non-collision-related damage to a vehicle, such as theft or vandalism, and would not cover the mechanic's negligence in this instance.