META DESCRIPTION: Does general liability cover your work truck? Learn how commercial auto, hired and non-owned auto, and contractor liability coverage differ.
Does General Liability Insurance Cover Your Work Truck in Arizona?
Your contracting business has general liability insurance. You have a work truck, a trailer full of tools and a crew that drives between job sites.
So what happens if someone causes an accident while driving for the business?
General liability insurance generally does not replace commercial auto insurance. A standard commercial general liability policy typically excludes bodily injury and property damage arising from the ownership, maintenance or use of an auto. Commercial auto coverage is intended to address covered vehicle-related liability.
For Arizona contractors, the distinction matters because a business can have general liability coverage and still have an important gap involving its vehicles.
What Does General Liability Cover?
Commercial general liability, often called CGL, addresses certain claims arising from business operations.
For example, a customer might allege that your work damaged their property. Someone could be injured at a job site and claim your business was responsible.
Whether a particular claim is covered depends on the policy, exclusions, endorsements and circumstances.
But a collision involving your work truck is a different type of exposure.
If an employee rear-ends another vehicle while driving to a job, don’t assume the company’s general liability policy will respond simply because the employee was working.
When Does a Contractor Need Commercial Auto Insurance?
Commercial auto coverage deserves attention when vehicles are used for business activities such as:
- Traveling between job sites
- Transporting employees, tools or materials
- Making deliveries
- Visiting customers or providing estimates
- Operating vehicles owned or leased by the business
Arizona’s Department of Insurance and Financial Institutions advises that using a vehicle for business purposes may require a commercial auto policy to obtain adequate coverage.
A truck doesn’t have to look like a commercial fleet vehicle to create a business-use question. A pickup used for estimates and material runs can be just as relevant to the coverage discussion.
What If the Truck Is Personally Owned?
This is where small contractors can get caught off guard.
Perhaps the truck is titled in your personal name, but you use it every day for your business. Or an employee drives their own vehicle to pick up supplies.
Personal auto policies differ in how they address business use. The fact that a vehicle has personal auto insurance doesn’t establish that every business-related trip is covered.
Tell your insurance professional how the vehicle is actually used. Include who drives it, who owns it, what it carries and whether it is used to tow a trailer.
What Is Hired and Non-Owned Auto Coverage?
Contractors sometimes use vehicles they don’t own.
A rented truck may be needed for a project. An employee might use a personal vehicle for a business errand.
Hired and non-owned auto liability coverage may address certain liability exposures involving vehicles rented, borrowed or used for business but not owned by the company. The exact scope depends on the policy.
It should not be confused with physical damage coverage for the rented or employee-owned vehicle itself.
Ask specifically about both liability and damage to the vehicle. They are separate questions.
Does Commercial Auto Cover the Tools in My Truck?
Not necessarily.
Commercial auto physical damage coverage generally concerns the insured vehicle. Tools, equipment and materials carried inside may require separate property coverage, such as an appropriate inland marine or contractors’ equipment policy.
Consider what would happen if a truck were stolen with several thousand dollars’ worth of equipment inside.
Would the vehicle be covered? What about the tools? Would there be different deductibles or limits?
Review those questions before a loss occurs.
What About a Trailer?
Trailers create additional questions involving ownership, liability, physical damage and the property being transported.
Don’t assume a trailer is automatically covered because the truck pulling it is insured.
Tell the insurer what type of trailer you use, how it’s registered, what it carries and whether it’s attached to a vehicle owned by the business or someone else.
Arizona’s Minimum Auto Insurance Is Not a Contractor Coverage Recommendation
Arizona requires liability insurance for vehicles operated on its roadways. The state’s standard minimum liability amounts are $25,000 for bodily injury to one person, $50,000 for bodily injury to two or more people and $15,000 for property damage.
Those figures establish a baseline legal requirement for ordinary vehicle liability coverage. They should not be treated as a recommendation for the limits a contracting business needs.
Commercial contracts, vehicle types, operations and potential losses can create different requirements.
See the Arizona Department of Transportation’s explanation of mandatory insurance for the state’s published minimums.
Three Questions to Ask Before Your Next Job
First, which vehicles are actually insured under the business’s auto policy?
Second, what happens when an employee uses a personal vehicle or the business rents a truck?
Third, are the tools, equipment and trailers adequately addressed?
These questions are more useful than asking whether the company is simply “fully insured.” That phrase doesn’t identify the policies, limits or exclusions involved.
FAQs About Contractor Vehicle Insurance
Does general liability cover an accident in my work truck?
Typically, a standard general liability policy excludes auto-related bodily injury and property damage. Commercial auto coverage is generally the policy to review for a business vehicle accident.
Can I use my personal pickup for contracting work?
You can use a personally owned vehicle for business, but you should disclose the actual use to your insurer and confirm the applicable coverage. Personal auto policies may not adequately cover some business activities.
Does commercial auto cover employees driving their own cars?
Not automatically. Ask about hired and non-owned auto liability coverage and how it applies to your operations.
Are tools in my truck covered by commercial auto?
Don’t assume so. Tools and equipment may need separate property coverage. Review the policy’s treatment of property carried in the vehicle.
Match the Insurance to the Way You Work
A contractor’s vehicle exposure depends on how the business operates. One owner driving a pickup to estimates has different needs from a company running multiple trucks, hauling equipment and sending employees across Arizona.
Review general liability, commercial auto, hired and non-owned auto, and equipment coverage together. That gives you a clearer picture of what each policy is intended to protect.
For questions about the commercial insurance products listed by AZ Insurance Agency, visit its agency information page or contact the agency. Confirm availability and licensing for your state before requesting coverage.