Auto Liability vs. General Liability
May 7, 2015
Author | Seth Maxwell, Vice President
I have lost count over the past 16 years the number of times I’ve been asked, “If I have Auto Liability, why do I need General Liability insurance?” or even, “What does General Liability even cover for a motor carrier?” If you have ever thought or asked a variation of one of these questions, hopefully this article will help you get a better understanding of the differences in these coverages.
What is Auto Liability insurance? What protections are provided? This coverage protects a motor carrier against the costs associated with their negligence while operating a motor vehicle. Auto Liability is a two-part coverage, insuring both bodily injury and property damage of others. Should an individual driving on behalf of the motor carrier cause injury or death to an individual, the carrier could be responsible for monetary damages. A few examples of bodily injury costs include medical payments, lost wages, and pain and sufferings. The second coverage provided under this policy is property damage, or in other words, the damage to someone else’s property caused by the negligence of the insured.
Auto Liability coverage continues to be at the forefront of discussions between brokers and motor carriers, due to the potential impact of increasing the federal minimum limit requirement. Currently, a motor carrier must carry a minimum of $750,000 of Auto Liability coverage to run as an “interstate carrier.” It remains to be seen what or if any adjustment will occur in the near future.
Why does a motor carrier need General Liability coverage? Have you ever said, “It’s glorified slip and fall insurance, I don’t see the need for it?” Truckers need General Liability coverage because their exposure is not limited to the road. The trucker’s General Liability policy protects against liability claims for bodily injury and property damage arising out of premises and operations, as well as products and completed operations. According to InsuranceFinancial.net, here are a few reasons truckers purchase General Liability protection:
- Actions of a driver while on the premises of others (loading docks, truck stops, motels, etc.)
- Customers coming onto your premises (trip and fall)
- Erroneous delivery of goods
- Fire legal liability
- Contractual liability (lease agreements, intermodal agreements, and the like)
At the end of the day, both policies are vital for a motor carrier to be properly covered. I would urge you to sit down with your broker and engage in a conversation specific to your company and the protection your policy provides.