Commercial Auto Insurance

Commercial Auto Insurance

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What Commercial Auto Insurance Is All About:

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From accidents to injuries, having a commercial vehicle for your business comes with many risks. However, for many businesses having a company vehicle is crucial, which means having the right protections in place are just as crucial as having the vehicle itself.

Let us introduce you to Commercial Auto Insurance. The insurance that protects your business from vehicle-related accidents, so you can sit back and enjoy the ride.

Read on to understand if this insurance is right for your company.

What Is Commercial Auto Insurance?

Business Automobile Liability Insurance is for businesses that own and operate vehicles. This insurance helps companies cover the costs of repairing or replacing company vehicles within the boundaries of the insurance policy.

Every business that uses vehicles to transact business needs Commercial Auto Insurance. Companies using their personal vehicles for business-related purposes may find that their personal insurance does not cover business-related risks. Personal Auto Insurance on a vehicle used for business purposes may not have enough insurance, leaving the company financially responsible for losses.

Business Automobile Liability Insurance was purposefully designed to help protect businesses from the unknown. With higher coverage limits than personal auto insurance, it helps safeguard businesses and improves a business’ chances of continual operations.

Commercial insurance contracts create partnerships between companies and insurers. Under these contracts, insurers are required to pay for physical damages based on the terms of the insurance policy and up to the limits of the insurance coverage. Insurers can’t cancel Commercial Auto Insurance if a business files a claim against the insurance policy.

Businesses can purchase Commercial Auto Liability coverage for their cars, trucks, heavy-duty trucks, and semi-trucks.

Depending on the coverage selected, this insurance covers vehicles the business owns, contracts with, and leases. It also helps cover injured employees should an accident happen.

Do I Need Commercial Auto Insurance?

This insurance comes in handy if your business:

  • Delivers goods using a vehicle
  • Transports people from place to place
  • Transports hazardous materials
  • Transports equipment for business use
  • Is used to tow or plow

Still not sure what you need?

CoverWallet's Insurance Checklist , you'll find a list of insurance types needed for your specific business or industry.

What Does Commercial Auto Insurance Cover?

At a High Level...

Like Personal Auto Insurance, Commercial Auto Insurance covers bodily injury and physical damage caused when someone driving a business vehicle gets into an accident or when a business vehicle is damaged.

Getting Into the Details...

To get a better understanding of what Business Auotmobile Liability Insurance covers check below:

Type of Claim Description Example
Bodily Injury Bodily injury is a type of liability coverage that helps businesses cover the financial losses associated with bodily injury resulting from an accident with a person driving a business vehicle. Commercial Auto Liability Coverage will provide you with legal defense costs in most cases. Your employee has a car crash and injures the other driver. If you have your insurance in place and up-to-date, your business will be covered for medical expenses, legal fees, loss of income, pain and emotional damage, and funeral costs if the victim was killed due to injuries sustained in the crash.
Medical Coverage Medical coverage covers the employee inside of the company vehicle if the limits of the workers' compensation insurance are reached. Your employee has a car crash and injures himself or herself. In the first place workers' compensation is covering the associated costs. If workers' compensation is not covering, commercial auto insurance will cover the medical, loss of wages and funeral expenses (should the employee die in the accident).
Collision Coverage Collision helps cover the physical damage company vehicles sustain as a result of colliding with another vehicle or object. Business Automobile Liability Insurance also covers a vehicle that is damaged due to a rollover. It’s raining heavily, and your car begins to hydroplane. The car ends up hitting a lamp post, damaging the bumper of the car and taking off the side mirror. Collision Coverage would take pay for the damages your vehicle sustained as a result of the crash.
Comprehensive Coverage Comprehensive Coverage helps cover the costs of repairing or replacing a business vehicle after it incurs damage from something other than a collision (i.e. a fallen object, fire, theft, vandalism, or weather-related damage). Losses specifically excluded from the insurance policy and those covered under Collision Coverage are not included in Comprehensive Coverage. A hurricane hits your city and causes a tree to fall on the company car. Comprehensive Coverage would cover the cost of the damage your commercial vehicle sustained.
Specified Causes of Loss Coverage This coverage is an alternative to the above described comprehensive coverage. The coverage applies only for losses caused by the perils listed (i.e. theft, lightning, civil disturbance, or explosion), as compared to the "all risks" nature of comprehensive coverage. These policies are often less expensive for SMEs, but the coverage is limited to only those perils identified when the policy was written. A robber steals the company vehicle. If you specified that you’d like coverage from theft, then your insurance will take care of the cost to replace the vehicle.

Each type of coverage serves a different purpose. The type of Commercial Auto Insurance a business needs depends on a defined risk management strategy established by the business. Companies can choose one type of coverage or enhance the protection it receives from insurers by purchasing multiple types of physical damage coverage and endorsements.

You'll Know It's the Right Policy If It Covers:

  • Bodily injury
  • Medical coverage
  • Collisions
  • Property damage
  • Damage other than collisions
  • Loading and unloading liabilities
  • Towing and labor cost

What Does Commercial Auto Insurance Not Cover?

Insurers will not cover physical damage company vehicles sustain if the damage is a result of an exclusion. For instance, if an employee is driving a company vehicle after hours and they are involved in a wreck while committing a crime, it is likely that the physical damage to the vehicle will not be covered.

The following are a few other exclusions typically found in this insurance policy:

  • Damage incurred by moving company vehicles
  • Damage incurred during war or civil disturbances
  • Wrecks resulting from employee relatives driving the company vehicle

This exclusion list is not exhaustive. There are many other exclusions that help direct how employees drive while behind the wheel of their company vehicles.

What Are the limits on Commercial Auto Insurance?

Limits are boundaries built into the coverage of an insurance policy. Businesses can choose the amount of their insurance coverage limit, which will determine the premium payment each month, semi-annually, or annually. Typical coverage limits available for Commcercial Auto Liability coverage are $500,000 and $1,000,000.

Businesses that are in industries that place drivers at a greater risk of experiencing an accident or incurring damage to their company vehicle benefit from purchasing a policy with a larger limit. With more insurance coverage, these companies have a higher limit for their insurers, before they are required to cover some of their liability costs.

How Much Does Commercial Auto Insurance Cost?

There are many factors insurers consider when they rate Commercial Auto Insurance. For instance, they consider the industry a business belongs to when they determine the cost of insurance. The following are additional factors insurance companies consider when determining the rate a business pays for Commercial Auto Liability coverage:

  • Employee driving records
  • Items being transported
  • The value of the vehicle
  • The type of vehicle
  • Amount of coverage
  • Type of coverage
  • Other risks

With risks being the driving force behind the cost of Commercial Auto Insurance, insurance companies examine a business’ potential for risk to determine the cost of coverage.

Minimum monthly cost
for low risk businesses
Median monthly cost
for average size businesses
Average monthly cost
for average size businesses

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