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Does Your Business Need a Commercial Auto Insurance Policy

December 26, 2018

When your business relies on vehicles for its operations, it’s time to get commercial auto insurance and to make sure you have the right amount of coverage. There are many differences between commercial and personal auto insurance policies, but the main differences have to do with the extent and purpose of coverage since businesses typically have more of a liability risk.

When is Commercial Auto Insurance Necessary?

There are many nuances to determine if you need a commercial auto policy and the exact coverages you’ll need. However, generally speaking, if you use a vehicle for your business, outside of commuting, a commercial policy is needed. Even if you are still using the vehicle for personal purposes, like running to the supermarket, many times you’ll still need a commercial auto policy.

This could be using your vehicle to deliver products or people for a cost, using your vehicle to conduct a service, needing a higher liability coverage then a personal policy can provide, if employees operate the vehicle or if your company owns the vehicle. You also may need a commercial policy if you are hauling heavy tools and equipment to conduct your business.

What Does Commercial Auto Insurance Cover?

In short, commercial auto insurance covers the same basics as a personal policy, but more. Typical policies will cover the following:

  • Property Damage Liability
  • Bodily Injury Liability to others
  • Personal injury to the driver and passengers including medical expenses and loss of wages.
  • Collision and Comprehensive coverage for costs associated with an accident.
  • Expenses for hospitalization, treatment, and funeral expenses
  • Uninsured and underinsured coverage
  • Loading and unloading liability
  • Towing and labor costs
  • Loaner transportation for when your vehicle is being repaired.

Sometimes it’s advisable for businesses to buy a commercial umbrella policy to cover very large claims and lawsuits, rather than trying to fully cover it through increasing the limits of your commercial auto policy. However, it’s advisable to discuss the best approach with your insurance agent.

How Much Does Commercial Auto Insurance Cost?

The cost of commercial auto insurance varies widely. Some of the factors that help determine the cost are the size of your business, the types and number of vehicles you have, what you’ll be using the vehicles for and the amount of coverage you’ll need for each one. However, there are many discounts your agent may be able to help with such as bulk discounts for insuring an entire fleet of vehicles.

A major factor in determining your costs is who will be driving the vehicles. Employees’ driving records and their age will also be a major factor. Typically, if your employee drivers are between 30 and 65, and have good driver records you’ll be able to get better insurance rates.

Finding the right commercial auto insurance for your business can be a complicated process. That’s why your independent agent is here to help completely customize your policy for your businesses needs, all while finding you the best rates from multiple providers.