Why do I need a Commercial General Liability policy?

Question

I am leasing a Dump Truck for my business. I have an auto policy, but the lessor is telling me that I need a Commercial General Liability policy as well. I know what a CGL policy is, but I have no need for it. Why do I need to insure my business with a CGL to lease a dump truck? I have already signed lease documents. I am not the "owner" of my vehicle until I fufill my lease, the bank is the current owner. Why do I need a CGL also?

Answer 1

OK, regerugged has part of the answer for you and I think Jim is a little confused about what general Liability is for. General Liability does NOT cover punitive damages and it does NOT cover liability for any amount of damage you might do with a vehicle.

The main purpose for General Liability is that there are certain stipulations under certain Auto policies regarding loading and unloading of vehicles. Sometimes it is covered and sometimes it is not which completely depends on the policy. The loading and unloading of vehicles is generally covered under the CGL policy.

The bottom line is that having a CGL policy helps you to cover all your bases. The lessor is just covering their own butt by having you get the CGL policy. They don't know what you will be using the truck for and they just want to make sure that regardless of what you do with the truck, you are covered so they don't get sued.

I hope this helps!

Answer 2

Because you are driving a commercial vehicle, and if you run into someone with it, Your business is liable, not the bank as the owner of the vehicle. The person you hit can sue your business, and if your the owner, you as well. Having Commercial Liability Coverage will cover your business's liability in the event that an accident happens.

Regular Auto insurance does not offer as much coverage, or coverage for punitive damages should you get sued. Regular auto insurance usually only covers damage to the vehicle and medical expenses up to a certain amount. That's all.

Answer 3

Well, depending on what company your commercial auto policy is with, they may or may not cover the "lift exposure" - if you, for example, hit the side of a house with the lift while emptying out a load of mulch, SOME commercial policies exclude that as "loading & unloading", which is covered under a CGL policy.

Your agent should be able to tell you that! If they don't know it, then you need someone who knows what they heck they are doing.

Answer 4

I will try to be as plain as possible. Jason S. nailed it.

The USE of the vehicle is covered under your Auto policy ...as you already know.

The END RESULT from the use of the vehicle is why they need General Liability coverage for. Case in point.

You take a load of dirt out to someones house and dump it on the neighbors very expensive rose bush by mistake.
The act of dumping and the actual pile of dirty itself has nothing to do with the "use of the Truck ".

The neighbor Sues you and his neighbor for property damage
to his Rose bushes. CGL is your needed coverage.

Answer 5

C.) Family members of the insured for their personal activities The other three fall under the definition of an insured in the commercial liability policy.

Answer 6

The main reason is that you operate a business. It is not possible to think of all of the things that can happen where you can be liable and not covered under the auto policy.

I recommend you follow your agent's advice.

Answer 7

Huh?