10 Important Facts About Commercial Auto Insurance

Here are 10 important facts about commercial auto insurance that business owners should know:

 1. Covers Business-Related Vehicle Use

   – Scope: Commercial auto insurance covers vehicles used for business purposes, such as transporting goods, carrying passengers, or traveling between job sites. Personal auto insurance typically does not cover these activities.

 2. Required by Law

   – Legal Requirement: Most states require businesses to carry commercial auto insurance for vehicles used in business operations. The minimum required coverage levels vary by state, but typically include liability coverage.

 3. Includes Liability Coverage

   – Primary Coverage: Commercial auto policies generally include liability coverage, which pays for bodily injury and property damage that you or your employees cause to others while operating a business vehicle.

 4. Covers a Range of Vehicles

   – Versatility: Commercial auto insurance can cover a variety of vehicles, including cars, trucks, vans, buses, trailers, and specialized vehicles like food trucks or construction vehicles.

 5. Higher Coverage Limits

   – Enhanced Protection: Commercial auto policies often offer higher coverage limits than personal auto insurance because the risks and potential damages involved in business-related driving are generally greater.

 6. Includes Coverage for Employees

   – Who’s Covered: Commercial auto insurance typically covers any employees who drive the insured vehicles as part of their job duties, providing liability protection for both the driver and the business.

 7. Covers Vehicle Damage

   – Physical Damage Coverage: Policies often include collision coverage (for damages from accidents) and comprehensive coverage (for non-collision-related damages, such as theft, vandalism, or weather damage).

 8. Offers Specialized Coverage Options

   – Customization: Businesses can add specialized coverage to their commercial auto policy, such as hired and non-owned auto coverage (for vehicles the business rents or borrows) or cargo insurance (for goods transported by the vehicle).

 9. Premiums Based on Multiple Factors

   – Pricing: Premiums for commercial auto insurance are influenced by factors such as the type and number of vehicles insured, the driving history of employees, the business location, the types of goods transported, and how the vehicles are used.

 10. Impacts of Claims on Premiums

   – Claims History: Filing claims can lead to higher premiums, especially if your business has a history of frequent or severe claims. Implementing safe driving practices and regular vehicle maintenance can help reduce the likelihood of accidents and claims.

Understanding these facts can help business owners ensure they have the right commercial auto insurance coverage to protect their vehicles, employees, and overall operations.