If I understand correctly, the insurer has only removed the liability cover for Asbestos-related claims. AFAIK, this isn't an unusual move these days - Asbestos claims costs Insurers a lot of money so they are no longer covering for it.
Apart from the Asbestos exclusion, you should be OK with liability cover though or do they not cover the garage at all?
The dangers of Asbestos are well know, and in general people are advised to get rid of it.
Some say "as long as you don't touch it you'll be grant", but everyone to his own. Given it is the garage only (and in sound state of repair), I probably wouldn't fix either it as a priority. Just be aware though next time you drill a hole and put a nail in - Asbestos fibers are nasty business.