As a business owner, you need to know the importance of preparing for unexpected situations. You can never know when an accident may occur or when your commercial vehicle may be stolen or damaged. That is why it is very important to have commercial auto insurance for your business vehicles.
Commercial auto insurance is a type of policy designed to protect businesses from unexpected financial losses that happen when their vehicles get stolen, damaged, or in accidents. This insurance can cover various types of vehicles, such as trucks, vans, cars, and businesses.
But how do you know when you need commercial auto insurance? Luckily, article aims to show you that.
How Does Commercial Auto Insurance work?
Just like I have mentioned above, this insurance helps to protect businesses from financial losses that can happen when their vehicles are involved in accidents, stolen, or damaged.
You need to know that this commercial policy is different from personal car insurance. The personal auto policy does not cover vehicles that are used for business purposes. And this is where commercial vehicle insurance comes in.
It provides coverage for physical damage and liability risks that are not covered by your personal car policy. The policy will protect your business in case of an accident, damage, or theft to your vehicle.
What Does Commercial Auto Insurance Cover?
Commercial auto insurance is designed to cover vehicles that are used for business purposes. Below is what’s covered:
- Bodily injury liability: This helps to pay for a third party’s injury that you or your worker cause accidentally. It also covers your legal expenses if you get sued over the incident.
- Personal Injury Protection: It pays for medical bills and other costs for you and your passengers, regardless of who was at fault in the car accident.
- Combined single limit: It provides one overall limit for property damage and bodily injury against you rather than two different limits.
- Property damage liability: It pays for damage you cause to another individual’s property in an accident. It also helps to pay for the legal expenses if you are sued over the incident.
- Medical payment coverage: This helps to cover the medical bills of you and your passengers, no matter who is responsible for the accident. Medpay won’t cover lost wages.
- Collision and comprehensive insurance: It helps to repair or replace your business vehicle after a car accident such as floods, theft, vandalism, collisions with animals, or severe weather.
- Uninsured and underinsured motorist coverage: This protects you if you get into an accident caused by a driver who does not have insurance or does not have enough coverage to cover the damages they caused.
Not having this coverage can put you at risk of having to pay for injuries and damage involving your company’s vehicles. You may have to pay for medical bills and legal expenses if you or your employees get injured in an accident involving your company vehicles.
When Do You Need Commercial Auto Insurance?
If you or your employees operate cars, trucks, or vans for work, you need commercial auto insurance. This coverage protects you from liability for damages and covers injuries you cause to other people in your business vehicles.
Even small businesses need this coverage. Whether your business is big or small, it helps reduce risks and financial losses from various accidents. Let’s look at certain situations where this insurance is essential:
• If you use your personal vehicle for business
If you often make use of your personal vehicle for business reasons, you should consider this coverage. Your personal auto policies exclude coverage for business use. So if you get into an accident while using your personal vehicle for business reasons, you may not be fully protected. Insurance for business vehicles can offer additional coverage beyond what your personal car policy offers.
• If you own fleets of vehicles for business
If you have a fleet of vehicles, this coverage is a good one due to the potential risks involved in using multiple company vehicles. Whether you own a fleet of vehicles or a single vehicle, commercial auto insurance is made to cover more than one vehicle and the drivers associated with the business. It covers various types of vehicles, such as box trucks, food trucks, service utility trucks, and work vans.
• If you transport passengers or goods
You will need commercial auto insurance if you transport passengers or goods regularly for business purposes. If your vehicle is damaged or you get in an accident while transporting passengers or goods, the policy can provide the coverage you need to replace or repair your vehicle.
• If your industry is considered high-risk
Certain industries are considered more high-risk than others regarding business vehicle insurance. If you drive a delivery truck, taxi, or other business vehicle, you will likely get charged more for your policy. Even if your industry is not considered high-risk, if you have a bad driving history or are involved in multiple accidents, you may be charged more.
• If you are financing or leasing your vehicle
If you are financing or leasing your business vehicle, your lender will likely ask you to have insurance. Ensure you check with your lender to know the type and amount of insurance they require before purchasing a policy.
• If your employees operate your vehicle
If your worker drives your company vehicle, you need this coverage. This coverage protects you if they get into an accident. Be ready to share the number of drivers and their driving records with the insurer when shopping around for a policy.
Insurance for business vehicles can help protect your company from financial losses from accidents and other events. Whether you have just one work van or a fleet of delivery trucks, commercial auto insurance can offer you the coverage you need. When shopping for an insurance policy, ensure you compare rates from various insurers to get the best price.
