Auto Hauling: General Liability Insurance Explained

General liability insurance is a type of insurance that protects truckers and trucking companies from financial losses in the event of property damage or bodily injury. It covers common risks such as customer injuries, customer property damage, advertising injuries, and libel and slander claims. This type of insurance is particularly important for for-hire truckers and motor carriers, as it provides coverage for situations not directly related to operating a truck, such as erroneous deliveries, damage to rented premises, and actions of a driver while on the premises of others. While general liability insurance is not legally required, it is often mandated by shippers/brokers, clients, or lessors, and it can help trucking businesses qualify for leases and contracts.

Characteristics of General Liability Insurance in Auto Hauling

Accidents, injuries, and property damage

In the US, large trucks make up only 4% of vehicles but are involved in over 9% of fatal accidents. In 2018, there were 552 potential truck-related injuries and 11 fatalities in King County, Washington State, alone.

Trucks are involved in a range of accidents, from multi-vehicle collisions to crashes with vulnerable road users such as motorcyclists, cyclists, and pedestrians. The size and weight of trucks mean that, even when a truck driver is not at fault, the consequences can be more severe than with other types of vehicles. For example, a garbage truck involved in a collision with a pedestrian in June 2019 resulted in the pedestrian's death.

Injuries sustained in truck accidents can be life-changing, including broken bones, spinal cord damage, and traumatic brain injuries. The financial consequences of these injuries can be significant, with medical bills quickly mounting. This is where general liability insurance comes in.

General liability insurance covers common risks such as customer injuries, customer property damage, and advertising injuries. It protects trucking businesses from the high costs of lawsuits and helps them qualify for leases and contracts. It covers bodily injury and property damage liability, as well as personal and advertising injury liability.

For example, if a truck driver accidentally injures a customer or damages their property, general liability insurance can help cover the costs of medical bills and repairs. It can also provide coverage in the event of a driver damaging another trailer during unloading or a company being sued for slander or libel.

General liability insurance is an important consideration for any trucking business, helping to manage risks and ensure financial protection in the event of accidents, injuries, and property damage.

Bodily injury and property damage liability

When it comes to auto hauling, general liability insurance is essential for protecting your business from financial losses due to third-party liability claims or lawsuits. This includes coverage for bodily injury and property damage liability, which is crucial in the event of accidents or injuries caused by your business operations.

With bodily injury coverage, your insurance will cover the medical expenses, rehabilitation, and legal costs of individuals injured in an accident caused by your business. This includes both pedestrians and individuals in other vehicles. It's important to select appropriate coverage limits to ensure sufficient protection in the event of significant accidents.

Property damage coverage, on the other hand, insures against damage to another person's property caused by your business operations, including vehicles, buildings, fences, and personal property. This coverage also includes legal fees if you're sued for property damage. Understanding property damage liability limits is crucial, as inadequate coverage could leave you responsible for costly expenses beyond your policy limits.

General liability insurance for auto hauling businesses provides essential protection against common risks. It covers customer injuries, customer property damage, and advertising injuries. It also helps your business qualify for leases and contracts while providing peace of mind and financial stability.

Personal and advertising injury liability

Personal injuries covered by general liability insurance include libel (written defamation), slander (spoken defamation), and copyright infringement. For example, if a trucking company were to use another company's logo in their advertising without permission, this could result in a personal injury claim.

Advertising injuries are similar harms committed in the context of advertising. This could include slandering a competitor in a television ad or using another company's advertising themes without permission. For instance, if a billboard for a new law firm used the same font and colours as a previous employer, the former employer might sue for advertising injury.

General liability insurance also covers violations of privacy, false arrest, wrongful eviction, and malicious prosecution. It's important to note that criminal offences are typically excluded from coverage.

In the context of auto hauling, personal and advertising injury liability coverage can protect trucking companies from the financial consequences of lawsuits arising from non-physical injuries. This can include court-ordered judgments, funeral expenses in fatal incidents, and other legal costs.

By having personal and advertising injury liability coverage as part of their general liability insurance, auto haulers can mitigate risks and protect their businesses from potential financial losses stemming from advertising injuries and personal rights violations.

Products/completed operations

The "products" portion of the coverage refers to any goods or products that your business manufactures, sells, handles, distributes, or disposes of. This includes automobiles or motor vehicles, which are considered high-liability risk products. If your company deals with auto hauling, this coverage is especially important.

On the other hand, the "completed operations" part refers to services or work that your business has finished. For instance, if your company installs solar panels, and one of them falls and injures a customer a month after installation, the "completed operations" coverage would apply.

Additionally, this type of coverage has some key exclusions. It does not cover situations where your product or service does not result in bodily injury or property damage. Moreover, any damage to your own product or work is also not covered by this insurance.

In the context of auto hauling, products/completed operations coverage can provide protection in several scenarios. For example, if you deliver auto parts to the wrong address, and the recipient gets injured while trying to use them, your insurance would help pay for their medical bills. Similarly, if you erroneously deliver a vehicle to the wrong location, and it gets damaged as a result, your insurance may cover the property damage.

Damage to premises rented to you

General liability insurance is a crucial aspect of risk management for auto hauling and trucking companies, providing coverage for a range of situations not included in auto liability policies. One of the key components of general liability insurance is "Damage to Premises Rented to You" coverage. This type of coverage is designed to protect businesses in the event of damage to a rented property and is particularly relevant for auto hauling companies that may rent premises for short-term use.

"Damage to Premises Rented to You" coverage is typically included in a business owner's general liability policy. It offers protection against claims made by landlords or property owners for damages caused to rented premises. This coverage is especially important for auto hauling companies that may temporarily rent facilities or use rented loading docks and truck stops during their operations.

The coverage consists of two main parts:

• Fire Damage to Rented Premises: This covers claims arising from fire damage to the premises rented or occupied by the insured. It is important to note that this coverage only applies if the insured is legally liable for the fire damage. In other words, the damage must be a result of the insured's negligence. The standard limit for fire damage coverage is typically $100,000, but higher limits can be purchased depending on the type of premises rented.
• Short-Term Rental Coverage: This coverage applies to premises rented for seven days or fewer and includes damage caused by perils other than fire. It covers claims arising from damage to the rented premises or their contents, as long as the insured is legally liable for the damage. This part of the coverage excludes water damage or other perils and only applies to the premises themselves, not the contents within.

It is worth noting that "Damage to Premises Rented to You" coverage does not extend to contractual liability. In other words, if a business assumes liability for fire damage under a lease agreement, the insurance will not cover claims resulting from that specific contract. Additionally, this coverage is not a substitute for commercial property insurance and is intended to provide excess coverage over any existing fire insurance on the property.

By understanding the specifics of "Damage to Premises Rented to You" coverage, auto hauling companies can ensure they have adequate protection in the event of damage to rented facilities. This coverage is an essential component of general liability insurance, helping businesses mitigate risks and manage potential financial liabilities.

Frequently asked questions