Which type of policy provides coverage for both liability and physical damage?

The correct choice here is Commercial Auto Insurance because it is designed to provide coverage for both liability and physical damage specifically for vehicles used in a business context. This type of insurance covers damages to the vehicle itself, such as in the event of an accident or theft (physical damage coverage), as well as liability coverage for injuries or damage that the insured vehicle may cause to third parties (liability coverage).

This dual coverage is essential for businesses that rely on vehicles for operations, office supplies, deliveries, or transporting goods and services, ensuring they are protected in the event of an accident or mishap.

Other policies like Auto Liability Insurance typically focus on liability protection and do not cover physical damage to the vehicle. Homeowners Insurance centers on property protection and liability for the homeowner's residence and is not applicable for vehicle-related risks. General Liability Insurance covers liabilities that might arise from general business activities but does not include coverage for physical damage to vehicles.