Commercial auto insurance is a variety of car insurance that is designed for companies and organizations that use commercial vehicles or cars in the course of their operations. There are many types of commercial auto insurers, although most specialize in one type of commercial auto insurance or the other. However, there are some which do offer the same coverage for both personal and commercial use.
What does commercial auto insurance cover?
Commercial auto insurance policies cover the business vehicle, not the driver. This means that if an employee drives the company car into a ditch, your business won’t be liable for any damage or injuries resulting from the accident. Commercial auto insurance also covers any damages to the business vehicle from vandalism or theft, as well as medical costs if an employee is injured in an accident while traveling on company business.
Commercial auto policy types
Commercial auto insurance policies protect your business against financial loss that results from vehicle crashes, damage caused by a driver to another person’s property, or injuries to people in your vehicles.
Commercial auto insurance policies come in a variety of types and coverages. Some of the most common include:
Bodily injury liability coverage. This pays for medical expenses and other damages if you or an employee causes an accident that injures another person.
Property damage liability coverage. This pays for damages to another vehicle or other property as a result of an accident you’re involved in.
Comprehensive and collision coverage. These coverages help pay for repairs when your car is stolen or damaged by fire or natural disasters such as hail storms and tornadoes. You may also be covered for glass breakage or vandalism if your vehicle is vandalized while parked at the office during business hours.
Medical payments coverage. This covers medical bills for those injured in an accident while riding as passengers in your vehicle even if they weren’t properly wearing their seatbelts at the time of the accident. It doesn’t matter who was responsible for causing the incident — anyone injured while riding as a passenger can make claims under this insurance policy.
Does your business need commercial auto insurance?
If you own or lease a vehicle for business purposes, then you need commercial auto insurance.
The following are examples of businesses that may be required to carry commercial auto insurance:
- A company that transports goods and/or passengers in a vehicle
- A company that leases office space in a building with its own parking lot or garage
- A company that provides transportation services for clients and employees, such as a shuttle service or taxi service
- A company that offers residential moving services
What affects commercial auto insurance rates?
The cost of your insurance depends on a combination of factors. Some are non-negotiable, while others are within your control.
Here are the most common factors that affect commercial auto insurance rates:
Your Personal Insurance History
Driving records can have a big impact on how much you pay for your commercial auto insurance policy. If you have tickets or accidents on your record, expect to pay more than someone with a clean driving history.
Usage
Another factor that affects commercial auto insurance rates is how often you use your vehicle for business purposes. If you use it every day for deliveries or service calls, your rate will be higher than someone who uses theirs only occasionally for these purposes.
Type of Vehicle
The type of vehicle you drive has a big impact on your premium. For example, if you own a delivery van or box truck, your premium will be significantly higher than if you own a passenger car or SUV. This is because these types of vehicles pose more risk to insurers — they’re more likely to be involved in accidents and claims than cars are.
If you own a business for which vehicles are essential to your day-to-day operations, then you should consider commercial auto insurance. Commercial auto helps protect your business from losses resulting from accidents that might not be covered under a standard auto policy. Commercial auto also offers some valuable business coverage options like workers’ compensation and general liability that you’ll want to be included in your policy. Research and compare commercial providers to help ensure that you’re getting the right protection in place.
