General Auto Liability Insurance: What's Covered And What's Not

Auto liability insurance is a type of insurance that covers damages to other people and their property in the event of an accident where you are at fault. This type of insurance is required by most states to legally drive a vehicle. Auto liability insurance covers two types of damages: property damage and bodily injury. Property damage liability covers repairs to another person's vehicle, a rental vehicle, and other structures and belongings. It also covers legal fees if you are sued for property damage. Bodily injury liability covers legal fees if you are sued for causing injuries to another person in an accident.

Bodily injury liability coverage

One of the most important aspects of bodily injury liability coverage is its ability to shield your assets if you are sued as a result of the accident. It can cover legal expenses, including attorney fees and court costs, providing you with a defence and potentially saving you from significant financial hardship.

When selecting an auto liability insurance policy, it is essential to pay close attention to the coverage limits. Typically, the policy will present three numbers, such as "100/300/100." The first two numbers refer to the bodily injury liability coverage per person and per accident, respectively. This means that your insurance will cover up to the specified amount per injured person and for all injuries in a single accident. It is crucial to choose adequate coverage limits to protect yourself financially in the event of an accident.

Property damage liability coverage

This type of coverage is especially important for business owners, as it can safeguard against financial losses arising from accidents involving company vehicles. While auto liability insurance covers incidents directly related to driving, general liability insurance offers a broader scope, including protection against product defects or operational errors.

In the context of auto liability, property damage coverage typically includes repairs to the other driver's vehicle, rental vehicle expenses while their car is being fixed, and damage to buildings, fences, or other structures. It also covers damage to personal property, such as electronics or belongings inside the vehicle.

It's important to note that property damage liability coverage has limits, and the required coverage amount varies by state. When selecting your coverage limit, consider factors such as whether you own a home or other valuable possessions, whether you frequently drive in high-traffic areas, and the presence of luxury vehicles in your area.

Additionally, if the cost of damages exceeds your coverage limit, you will be responsible for the remaining amount. Therefore, it's advisable to choose a higher limit or consider adding an umbrella insurance policy for extended protection.

By understanding the specifics of property damage liability coverage, you can make informed decisions about your auto general liability insurance and ensure you have adequate protection in the event of an accident.

Personal injury protection

PIP coverage also extends beyond the scope of medical bills. It can help cover lost wages if you are unable to work due to your injuries, and this benefit applies even if you are self-employed and need to hire temporary workers. Additionally, PIP can assist with funeral, burial, or cremation expenses following a car accident. If you pass away in an auto accident, PIP insurance can help replace your lost income for your surviving dependents. It can also help pay for services you would typically perform, such as childcare and house cleaning, if you are unable to do so due to your injuries.

It is important to note that PIP does not cover everything. It will not cover the injuries of other drivers in a collision or any injuries sustained while committing a crime, such as fleeing the police. Additionally, it does not cover injuries sustained while being paid to drive or damage to someone else's property. To ensure comprehensive coverage, it is recommended to consider additional policies, such as bodily injury liability insurance and property damage liability insurance.

Product liability coverage

Product liability insurance is a crucial component of a small business insurance policy. It provides protection for businesses from claims arising from bodily injury or property damage caused by a product they created, distributed, manufactured, or sold. This type of insurance is not limited to "manufacturers" but extends to distributors, wholesalers, and importers who may face lawsuits due to alleged negligence.

Product liability insurance is typically included in Comprehensive General Liability (CGL) policies under the "products hazard" provision. It covers legal fees, medical costs, and compensatory damages in third-party lawsuits. Without this coverage, businesses may have to pay out of pocket for these expenses, which can be financially devastating.

The types of defects commonly covered by product liability insurance include:

• Design defects: Claims that the product has an inherent defect in its design.
• Manufacturing defects: Claims that a mistake or accident during production made the product defective.
• Marketing defects: Claims that the product's marketing had errors, such as insufficient instructions.
• Improper warning: Claims that the product lacks adequate warnings about its proper use.
• Strict liability: Covers situations where a customer is injured by a product, even if the business is not found negligent.

It is important to note that product liability insurance does not cover problems with software, apps, or other technical products. Additionally, it does not include product recall costs or accidents involving customers, such as slip-and-fall injuries.

Advertising injury

There are several types of offenses that fall under advertising injury:

• Libel: Libel is written defamation that damages a person or company's reputation, ridicules them, or harms them professionally.
• Slander: Slander is spoken defamation that damages a person or company's reputation.
• Invasion of Privacy: This includes making oral or written statements that misappropriate someone's name or likeness, intrude on their privacy, or disclose private facts.
• Misappropriation of Advertising Ideas: This involves using another company's advertising themes, concepts, or styles without permission.
• Copyright Infringement: This includes using, distributing, or displaying copyrighted work, such as slogans, without the owner's permission.
• Product Disparagement: This refers to making false or offensive statements about a company's products or services, resulting in damages.

It is important to note that advertising injury coverage does not typically protect against false advertising claims. If a business knowingly engages in false advertising, most general liability policies will exclude coverage. Additionally, there are certain exclusions to advertising injury coverage, such as claims arising from criminal acts, contractual liability, and failure to fulfill contract terms.

Frequently asked questions