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Commercial Auto Insurance: Protecting Your Business On The Road

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By Author: Rob Newman
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Unlike personal auto insurance policies, commercial auto insurance is specifically designed to cover vehicles used in a business setting and is crucial in ensuring that your business is protected against the financial consequences of automobile accidents.

It’s important to note that a personal car insurance policy may not provide adequate coverage for vehicles used in a business context, making commercial auto insurance a necessary investment for any business that operates vehicles.

What Does Commercial Auto Insurance Cover?

Commercial auto insurance covers the financial costs of damages and injuries resulting from accidents involving company vehicles. It typically protects for:

Liability: Covers the costs of third-party damages and injuries caused by a business vehicle, including medical expenses and property damage.
Physical damage: Covers repairs or replacement of the business vehicle(s) in the case of collision or theft.
Medical expenses: Covers medical costs for the driver and passengers of the business vehicle in case of an accident.
Uninsured/Underinsured motorist coverage: ...
... Protects the business in case of an accident caused by a driver who does not have insurance or does not have enough insurance to cover the damages.

Commercial auto insurance offers two types of physical damage coverage. Collision coverage protects against damages resulting from auto accidents, while comprehensive coverage protects against damages from non-collision causes, such as weather, theft, and other events.

Additionally, there are two types of liability coverage. Bodily injury to others in case of an at-fault accident. Property damage offers liability coverage for damages to others’ property in case of an at-fault accident.

The specific coverage and limits of a commercial auto insurance policy can vary, and it is important for businesses to carefully review and select the coverage that best fits their needs.

Do You Need Commercial Automobile Insurance for Your Business?

Having commercial automobile insurance is a requirement for businesses that own, lease, hire or use vehicles for operations. In most states, liability coverage is mandatory for owned vehicles. Businesses that engage in interstate transportation of goods or people are also required by federal law to have commercial automobile insurance. For larger commercial vehicles, such as trucks, a commercial truck insurance policy may be necessary to fully protect your business.

Commercial auto insurance is necessary for vehicles that are used for business purposes, have a commercial license plate or tag, or are registered commercially. In addition to vehicles used for business purposes, commercial auto insurance is also recommended for vehicles used by you or your employees for work-related tasks. This includes driving clients to the airport, going on sales calls, transporting packages to a shipper, or shopping for office supplies.

Additional coverage could be required if your business does any of the following:

Food, product, or publication deliveries
Chauffeur, taxi, or limousine services
Transportation of flammables or hazardous substances
Equipment transportation
Vehicle towing

How Commercial Auto Insurance Works

Commercial auto insurance provides coverage for vehicles used in the operation of a business and the drivers of those vehicles. If an accident occurs, the policy protects your business against liability claims made by others who were injured or had their property damaged as a result of the accident. In the event of a claim, your liability coverage will pay for damages up to the policy limit and also cover the costs of defending you or the driver in a lawsuit. Any damages above the policy limit are the responsibility of the business.

Does a Commercial Policy Cover Personal Use?

Commercial auto insurance policies often cover the personal use of business vehicles, but there may be limitations to the coverage provided for family members. It’s important to check with your insurance agent to determine if you need additional coverage for any family members who may be using the business vehicle.

Make Sure Your Business is Protected

To make sure your business is protected, reach out to one of our insurance agents today. Your business vehicles are an essential part of your operations, and the right insurance coverage is vital to ensure that you and your employees are protected on the road. Don’t take any chances with your business’s financial security.

This article first published on the Newman & Tucker Insurance blog.

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