Commercial Auto Liability

Overview

Commercial Auto Liability insurance covers a business's legal liability for bodily injury and property damage caused by vehicles used in its operations. This includes accidents involving company-owned vehicles, rented vehicles, and employee-owned vehicles used for business purposes.

Covered Vehicle Categories

The ACORD 25 Automobile Liability row includes checkboxes that indicate which categories of vehicles are covered:

• Any Auto: The broadest designation — covers all vehicles regardless of ownership. This is the simplest to verify and the most comprehensive.
• All Owned Autos Only: Covers vehicles titled in the business's name. Does not cover rented or employee-owned vehicles.
• Hired Autos Only: Covers vehicles the business rents, leases, or borrows. Important for businesses that rent vehicles for specific projects.
• Scheduled Autos: Covers only specific vehicles listed by VIN on the policy. If a vehicle is not on the schedule, it is not covered.
• Non-Owned Autos Only: Covers vehicles owned by employees or others when used for business purposes. Critical for businesses whose employees drive their personal vehicles for work.

For comprehensive protection, most compliance programs require either "Any Auto" or the combination of "All Owned," "Hired," and "Non-Owned."

Limits Structure

Commercial Auto Liability is typically written with one of two limit structures:

Combined Single Limit (CSL): A single dollar amount that applies to all bodily injury and property damage arising from a single accident. This is the most common structure. A $1,000,000 CSL means the insurer will pay up to $1M total for all injuries and property damage in one accident.

Split Limits: Separate limits for different types of damages:

• Bodily Injury Per Person — maximum for one injured person
• Bodily Injury Per Accident — maximum for all injured persons in one accident
• Property Damage Per Accident — maximum for property damage in one accident

CSL is generally preferred by compliance programs because it provides more flexible coverage. With split limits, you could have adequate per-person coverage but insufficient per-accident coverage if multiple people are injured.

Why It Matters for Compliance

Any vendor that uses vehicles in the course of their work for you creates auto liability exposure on your property and surrounding areas. A delivery driver causing an accident while heading to your building, a contractor's work truck hitting a pedestrian in your parking lot, or a service van damaging another vehicle — all create potential liability.

If the vendor does not carry adequate Commercial Auto Liability and an accident occurs during business operations on your behalf, you could face claims as the party that hired the vendor.

Common Compliance Requirements

Example

A property management company hires a landscaping firm that uses trucks and trailers to transport equipment between job sites. The property manager requires the landscaper to carry $1,000,000 CSL Auto Liability covering "Any Auto." The landscaper's certificate shows $1,000,000 CSL with "Hired Autos Only" checked — meaning the landscaper's own trucks are not covered under this policy. The certificate is non-compliant because it does not cover the owned vehicles that will be used on the property manager's sites.