General liability vs. auto liability insurance

Commercial general liability insurance covers common third party risks and lawsuits for many small businesses.

It helps small business owners navigate lawsuits from third parties (non-employees) when it comes to instances of:

• Bodily injuries that occur on your business property
• Property damage resulting from employee actions or on company property
• Advertising injuries and personal injuries such as slander, libel, or copyright infringement

Many general liability insurance policies also include product liability insurance, which protects your business from lawsuits if a customer claims your product caused physical damage or injuries.

Commercial auto insurance covers your business-owned vehicles while they're being used for work purposes. This policy is required by most states (except New Hampshire) in order to operate any vehicle for work purposes. Your liability limits and minimum coverage are established at the state level.

Auto liability coverage protects your business if there's an auto accident in a company vehicle and you or your employees are at fault. It covers property damage liability, bodily injury liability, medical expenses, and legal fees.

You can add coverage to your policy, such as collision coverage and physical damage coverage for incidents such as vandalism, theft, and fire.

If you get into an accident and the other motorist is uninsured, your commercial auto policy would protect your business from the medical or repair costs.

Leased, rented, or personal vehicles used for the business are not covered under a standard auto insurance policy. For these, you'd need separate coverage called a hired and non-owned auto insurance (HNOA) policy.

General liability and auto liability insurance coverage are important for small businesses, but both cover different types of risk. The right coverage for your business will depend on the kind of work you do.

If your business works with vendors, other businesses, or members of the public, general liability insurance is an important policy to protect against third-party lawsuits.

If your business uses company vehicles, commercial vehicle insurance is not only a good idea, but it's likely mandatory in your state.

Most small businesses will require both types of insurance to meet their business needs.

Whether you need both policies will depend on your business needs and risks.

For example, if your business doesn't own commercial vehicles, you won't need an auto policy because the coverage would never realistically benefit your business. Additionally, if you operate a business with very little public interaction, you may not necessarily need a general liability policy.

However, most business owners purchase both policies to ensure they're covered from the myriad risks associated with running a small business. General liability insurance, in particular, covers many common lawsuits and tends to be the first policy many small businesses purchase.

Your general liability coverage and corporate car insurance policies will cover many of the common risks associated with running a business, but they won't cover everything.

All insurance policies have exclusions for types of incidents they won't cover. For general liability insurance, most insurance companies will not cover intentional damage, criminal acts, preventable risks, and subcontractors.

Auto insurance also has its own limits to what it covers, and many auto service, trucking, or transportation companies may need supplemental coverage, like bobtail insurance to cover their trucks when they're driving without a trailer or for non-business purposes.

Another example includes auto body shops and other businesses with garages which will likely need additional coverage called garage liability insurance or garage keepers insurance, depending on their specific needs.

Lastly, commercial auto and general liability may not fully cover an incident or accident, depending on your coverage limits. While most policies are sufficient to cover most accidents or lawsuits, an exceptionally expensive liability claim may exceed your policy and cost you out-of-pocket. An umbrella policy can help cover the difference should you need additional coverage.

You can talk with a licensed insurance agent to ensure that you and your business are fully covered for your specific industry and risks.

Complete one easy online application and we'll help you get connected with free insurance quotes from the U.S.'s leading insurance companies.

You can also speak to our licensed insurance agents with any questions you might have about your auto or general liability policies, or other important types of coverage your business may need, such as professional liability or workers' compensation.

Once you find the right policies for your needs, you can begin coverage and receive your certificate of insurance, often within 24 hours.