Does General Liability Cover Auto Accidents?

Understanding General Liability Insurance

General liability insurance provides protection for businesses against claims of bodily injury or property damage to others. These claims typically arise from incidents occurring on business premises or as a result of business operations. For example, if a customer slips and falls in a retail store, incurring medical expenses, the general liability policy would typically respond to cover those costs. It also extends coverage to property damage caused by business activities, such as a contractor accidentally damaging a client’s property during a renovation.

This type of policy also covers claims related to personal injury, such as libel or slander, and advertising injury, which can include copyright infringement in an advertisement. Medical payments coverage is often included, addressing minor injuries to non-employees that occur on business property, regardless of fault. The aim of general liability insurance is to safeguard a business’s assets from legal liabilities arising from everyday operations and interactions with the public.

General Liability Exclusions for Auto Accidents

General liability insurance policies are not designed to cover claims arising from auto accidents. These policies contain an “auto exclusion” clause. This clause states that bodily injury or property damage claims resulting from the ownership, use, or entrustment of an “auto” are not covered. An “auto” is defined within insurance policies to include cars, trucks, vans, and other motorized vehicles designed for use on public roads.

This exclusion applies whether the vehicle is owned by the business, rented, or is a personal vehicle used for business purposes. The rationale behind this exclusion is that the risks associated with operating vehicles are distinct and require specialized coverage. If an employee causes an accident while driving a company vehicle, the general liability policy would not provide coverage for the resulting damages or injuries. Businesses must seek specific insurance solutions for vehicle-related risks.

Commercial Auto Insurance Coverage

Commercial auto insurance is the policy designed to cover vehicles used for business operations. This coverage is for businesses that own, rent, or have employees use personal vehicles for work-related tasks. It addresses risks associated with business vehicle use, providing protection against liabilities from accidents.

Commercial auto policies include liability coverage for bodily injury and property damage that a business vehicle causes to others. This means the policy can pay for medical expenses of injured parties and repair costs for damaged property if the business’s vehicle is at fault in an accident. Additional coverages include medical payments or personal injury protection, covering medical expenses for the driver and passengers regardless of fault. Uninsured and underinsured motorist coverage protects the business if its vehicle is hit by a driver without sufficient insurance. Physical damage coverage, including collision and comprehensive, protects the business’s vehicles from damage due to accidents or other perils like theft or natural disasters.