Your business likely utilizes vehicles that operate on public roadways, which make commercial auto insurance an essential choice. It provides liability and physical damage coverage for the cars or trucks your company owns, leases or rents from third parties.
Most states mandate liability coverage for bodily injuries and property damages caused by an accident involving vehicles owned, leased, or hired for use by your business. A commercial auto policy usually provides greater liability limits than your personal policy does.
Liability Coverage
Commercial auto insurance provides your business with liability protection in case one of its employees causes an accident. This coverage helps cover medical costs, property damage and legal fees related to an incident – it is also essential that high limits are set as costs from accidents can quickly add up.
Additionally to basic liability coverage, it may be worthwhile considering uninsured/underinsured motorists coverage and/or medical payments coverage as these policies protect you against injuries caused by drivers without adequate or sufficient insurance.
If your business includes passenger transportation services, hire and non-owned vehicle coverage is also recommended to provide protection for vehicles your employees rent or borrow for work-related driving needs.
Personal cars may qualify for coverage under standard auto policies, but for commercial trucks, vans and trailers used exclusively for business they require their own customized policy tailored specifically to your company needs. An independent agent can help determine what coverage best fits your organization.
Physical Damage Coverage
Commercial auto policies offer affordable solutions for replacing or repairing company cars, trucks or vans damaged in an accident or unexpected circumstance. Most policies provide three types of physical damage coverage: comprehensive, specified perils and collision. Some business owners choose self-insurance (putting aside money) for older vehicles while purchasing only collision and comprehensive coverage on newer ones to keep premiums down.
If your business provides delivery or transportation services, Commercial auto insurance for company cars may be essential. Employees driving personal vehicles for work-related reasons may also require coverage if these cars belong to the organization.
Contracts or agreements might mandate non-owned and hired auto coverage as an add-on to their commercial auto policy, providing liability protection from employees using hired, non-owned and/or unlicensed vehicles in their employment on behalf of their employer. Such coverage typically comes as an add-on option.
Uninsured/Underinsured Motorists Coverage
An effective commercial auto policy often offers protections that help cover the expenses associated with an accident — even when another driver is at fault. Uninsured motorist coverage (UM) and medical payments coverage (MedPay) are both typically available with most business auto policies.
Your company might require commercial vehicle insurance if it owns or leases company cars, vans or trucks to transport tools and equipment between job sites. Contractors, landscapers and construction companies likely require one as well. Delivery services, taxi and limousine companies as well as food services like restaurants or catering businesses often need commercial auto policies as well.
Most personal auto policies exclude driving a car for business use, leaving employees vulnerable in an accident involving a personal vehicle being used at work. To address this, many small businesses purchase hired and non-owned auto liability coverage to extend existing limits to cover accidents in vehicles that are rented or loaned out for use during work related activities. Also available is roadside assistance coverage as well as blanket additional insured policies to make adding drivers or vehicles easier.
Comprehensive Coverage
Business owners rely on their vehicles for various tasks – from hauling materials and tools to jobsites to transporting clients or delivering products – that directly benefit customers and generate profit. Yet any accident, however small, could have serious repercussions financially; commercial auto insurance provides essential protection that helps businesses operate without disruptions and avoid potential liabilities.
Commercial auto policies generally cover bodily injury liability, property damage liability and collision coverage with higher legal cost limits than personal auto policies. They may also offer additional features such as hired and non-owned vehicle coverage, roadside assistance services and comprehensive coverage options.
Hired and non-owned auto coverage (also referred to as business auto rental endorsement) helps protect you when an employee rents a vehicle for work and is involved in an accident. Roadside assistance covers expenses like towing, fuel or battery delivery, locksmith services and flat tire changes while comprehensive coverage pays for damages caused by non-collision events such as theft, fire or natural disasters – these coverages may be included with either your liability policy or sold separately as standalone commercial auto policies.
Hired and Non-Owned Vehicle Coverage
If your business relies on vehicles for transportation but doesn’t own its own fleet, hired and non-owned auto coverage could be essential. Typically included as an add-on to commercial auto policies, this form of liability coverage covers incidents involving non-owned vehicles (like rentals or personal cars borrowed by employees for work-related errands).
Hired and non-owned auto coverage may come to the rescue when an employee is traveling to meet with clients when a third-party driver hits their business vehicle, providing coverage for repairs and damages caused by another motorist. Furthermore, hired and non-owned coverage extends to accidents that happen while employees use their personal cars for work-related purposes if designated as drivers at the time of an incident.
However, hired and non-owned auto coverage won’t protect your business in situations when an employee uses his or her own personal car for personal errands during work hours – in such instances personal car insurance must be in place as well.
