Which insurance coverage protects a contractor when their work vehicle causes property damage to a third party?
Correct Answer
C) Commercial auto liability
Commercial auto liability insurance covers damages caused by company vehicles to third parties, including property damage and bodily injury. This is separate from general liability coverage.
Why This Is the Correct Answer
Commercial auto liability insurance is specifically designed to cover damages caused by business vehicles to third parties, including both property damage and bodily injury. This coverage is mandatory for commercial vehicles and is separate from other types of business insurance. When a contractor's work truck, van, or other company vehicle causes an accident that damages someone else's property, commercial auto liability provides the necessary protection and coverage for claims and lawsuits.
Why the Other Options Are Wrong
Option A: Professional liability
General liability covers slip-and-falls, property damage from construction work, and general business operations, but specifically excludes vehicle-related incidents which require separate auto coverage.
Option B: Workers' compensation
Professional liability (errors & omissions) covers mistakes in professional services, design errors, or failure to deliver promised services, not vehicle accidents.
Option D: General liability
Workers' compensation covers injuries to employees while they are working, not property damage caused by vehicles to third parties.
Memory Technique
Think 'AUTO damage = AUTO insurance' - any vehicle accident needs the insurance type with 'auto' in the name.
Reference Hint
Florida Construction Industry Licensing Board study materials, Chapter on Insurance Requirements and Risk Management
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