Business Insurance; Commercial Auto Insurance

What Is Commercial Auto Insurance?

Business auto insurance also known as commercial auto insurance, commercial vehicle insurance and commercial car insurance is business insurance designed to protect you, your employees and the vehicles you use for daily business use.

Commercial auto insurance protects your company from financial responsibility if your business is at fault in an accident involving bodily injury or property damage. It can also protect you from theft, vandalism, collisions and more.

Choosing the right commercial auto insurance policy can be complicated. It’s different from buying a personal auto insurance policy. Vehicles used for business use are prone to more risk than your personal vehicle so the way the premiums work are different. 

Commercial auto insurance protects you, your employees, your assets and contracted drivers that you hire for business operations. 

Most states in the U.S. make it mandatory to carry commercial auto insurance if you have company vehicles used for business purposes. Liability insurance for property damage and bodily injury could occur if one of your company vehicles is to get in an accident. 

Commercial auto insurance can protect your company in many ways. Below are some of the situations it may address;

Auto liability insurance; If you decide to increase the number of vehicles your company has, this can extend your liability insurance.

Individual named insurance; This can extend the current commercial auto insurance policy you have to help protect the vehicles you do not own.

Single deductible options; If you are constantly hauling expensive equipment, this commercial auto insurance coverage can help to protect those items. You will end up paying one deductible for claims on the trailer and vehicle.

Hired and non owned vehicle auto insurance; This is used to help cover expenses for the accidents involving vehicles that your company doesn’t own. 

Trailer interchange insurance; If you happen to not own the trailer that your company is hauling this coverage will protect what you rent.

Why do you need commercial auto insurance?

The majority of personal auto insurance policies will not cover commercial claims. For example if you get into an accident with your personal vehicle while using it for business purposes there is no duty to defend the claim. The damages may not be covered by your personal auto insurance policy. You would be required to pay for the legal costs out of pocket and your personal auto insurance policy wouldn’t cover anything. 

If the vehicle you use is for business purposes, you should get commercial auto insurance coverage. Personal auto insurance typically does not provide coverage for business related accidents. 

Personal Auto Insurance vs. Commercial Auto Insurance

It can sometimes be difficult to tell the difference between commercial auto insurance and personal auto insurance. There’s always a good chance you will need to carry both forms of auto insurance coverage if you use vehicles for business purposes. 

For example if as a business owner you use vehicles to pick up clients or deliver products, keep in mind there’s a very good chance you will not be covered under your personal auto insurance policy. Your personal coverage will not pay for damages if an accident occurs while driving for business purposes. 

Personal auto insurance policies usually will exclude business use. If as a small business owner you use vehicles for business use, it would be a very good idea to get commercial auto insurance coverage.

Commercial auto insurance policies will cover you for more risks than personal auto insurance. This is one of the main reasons commercial auto insurance premiums are higher than personal coverage. 

What Does Business Auto Insurance Cover?

The three main categories of people covered under commercial auto insurance are the named insured, omnibus users, and permissive users. 

Typically the owner of the business that takes out the policy would be the named insured. As the named insured you should be covered even if you aren’t directly involved in an accident. 

Permissive users are your employees and others that have been given permission to operate your vehicles. The omnibus users are the people that can be held liable for an accident caused by you or the permissive users. 

Commercial auto insurance is very similar to personal auto insurance coverage. Below are some of the basics when it comes to coverage;

Property and bodily injury liability; If you or your employees are found liable for an accident that causes third party damage or bodily injury, you should be covered. Commercial auto insurance will pay for medical bills, pay for repairs, lost wages, legal fees and more.

Medical payments; Commercial auto insurance will help to pay for medical expenses for you and your employees.

Collision coverage; Most damages will more than likely be covered. Collision coverage will help to pay for repair costs.

Types of Vehicles Typically Covered by Commercial Auto Insurance 

The types of vehicles that can be covered by a commercial auto policy can include the following:

• Passenger cars

• Vans
  
• Pickups
  
• SUVs
  
• Cement mixers
  
• Delivery Vans
  
• Tractor Trailers
  
• Flatbeds
  
• Cranes

If you would like a free commercial auto insurance quote or have additional questions, please give us a call today at 916 313 6100