What Is Commercial Auto Insurance?
Commercial auto insurance provides many of the same coverages as a personal auto policy, but it is for businesses who own, lease, hire or borrow cars for their operations or for their employees who use their personal auto for use in your business operations.
What Does Commercial Auto Insurance Cover?
Commercial auto insurance provides several types of coverage to protect against financial loss to your business.
- Liability Coverage (required by law)
- Bodily Injury Liability: Pays for medical expenses, lost wages, and legal expenses if you or your employee injure another person in an accident.
- Property Damage Liability: Covers repair or replacement costs for damage to another person’s property caused by your business vehicle.
- Physical Damage Coverage (will be required if the vehicle is financed or leased)
- Comprehensive Coverage: Protects against non-collision incidents such as hail, theft, and fire.
- Collision: Pays for damage to your auto if it collides with anything (except deer or other animals as that is covered under comprehensive coverage).
- Personal Injury Protection (recommended)
- Covers medical expenses for passengers (employees and non-employees) regardless of who was responsible for the accident.
- Uninsured/Underinsured Motorists
- Liability: Provides coverage if you or your passengers are injured in an accident and the responsible does not have insurance, or enough to cover the full expense.
- Property Damage: Pays for damage to your vehicle if an uninsured or underinsured motorists hits your vehicle, or for hit and run.
- Hired and Non-Owned Auto
- Provides coverage if employees rent a car or uses their personal auto policy during operations of the business. This is very important as most commercial auto policies only cover the autos listed on the policy.
- Other Coverages
- Customized equipment provides extra coverage for the financial loss due to updates you make to your vehicle.
- Rental Reimbursement provides coverage to rent a vehicle if your insured vehicle is in the shop due to a covered loss.
- Towing and/or rental reimbursement.
Who Needs Commercial Auto Coverage?
Basically any business who uses vehicles for anything but commuting should have commercial auto coverage. Examples of when you should consider commercial auto coverage:
- If your business owns, leases, or rents vehicles.
- Your employees drive company vehicles.
- You transport goods, equipment, or people for a fee.
- The vehicle is wrapped or has signage, carries tools or equipment.
- Employees use their own vehicles for business (beyond commuting).
*Some personal auto policies can cover personally owned vehicles for business use but this is typically limited to sales people making sales calls or realtors. Not sure what you need? Call our friendly team of advisors and then can help advise you.
How is the Cost of my Commercial Auto Insurance Determined?
Many of the same things that determine your personal auto insurance premiums affect commercial auto premiums. Examples:
- Employees' personal driving histories
- Types of vehicles, age, cost, customizations and cost to repair
- Radius of miles driven from the garaged site
- Your company's loss history