The Role of Commercial Auto Insurance in Protecting Your Business Assets
A commercial auto insurance policy is critical if you use vehicles for business. Your business needs comprehensive protection from a single work truck to a fleet of delivery vehicles.
Unlike personal auto policies that cover only commuting, commercial auto insurance covers business use of vehicles. This includes a wide range of coverages like:
Damage to Your Vehicles
Personal and commercial auto insurance typically provides liability coverage if you or an employee get into a wreck in a company vehicle. This can cover bodily injury, property damage, and pollution cleanup expenses. Commercial auto policies can also include hired and non-owned auto coverage, which helps if employees drive personal vehicles on company business or use their cars for work.
For example, if a local graffiti crew damages your bread delivery truck while parked on the street, commercial auto insurance might help pay to repaint it. In many cases, an insurance agent can help you understand the differences between a personal auto policy and a commercial car insurance policy so that you can decide what kind of protection your business needs.
The cost of a commercial auto insurance policy can vary, depending on your business’s needs and the number of vehicles included. However, on average, our rate estimates show that a small business with one or two company cars would expect to pay about $144 per month for a typical full-coverage commercial auto policy.
You could even consider installing a Van Alarm if you own a company van, as a deterrent to potential thieves. It’s worth getting in touch with your insurance provider and discussing if this will lower your insurance rate, and also comparing different insurance quotes based on this.
Damage to Other People’s Property
A commercial auto policy covers vehicles primarily used for business, including cars, trucks, and vans. It offers liability, physical damage coverage, and specialized options like uninsured/underinsured motorist and personal injury protection.
Say your employee driving a company vehicle rear-ends a church van carrying children to an after-school program. The accident isn’t severe, but several people are hurt, and your employee’s low liability limits won’t cover the medical expenses. A commercial car insurance policy with hired and non-owned auto coverage might help pay for the damages up to your policy limit.
You can even get a commercial auto policy to protect your work vehicle if it’s stolen or damaged by a covered cause of loss. Vandalism and other incidents unrelated to an accident usually aren’t covered by regular auto insurance, but a commercial auto policy might provide some protection. A trusted independent agent will take the time to understand how you use your vehicles and can help you find a policy that offers optimal coverage at an affordable price.
Liability to Others
A commercial auto policy protects businesses of all sizes from litigation arising from automotive incidents. Whether your employees are driving to make a delivery or transporting a client, commercial auto coverage protects your business from the financial consequences of an accident during normal business operations.
For example, if your employee is distracted while talking on the phone while driving to a meeting and strikes a van full of customers, the resulting injuries and property damage could cost you a lot of money. Commercial auto insurance may cover these expenses, as well as legal defense costs, in the event your company is sued.
If your employees drive personal vehicles for work, you can add an optional policy called hired and non-owned auto liability. This provides liability protection when employees go rented or borrowed cars for work purposes. Your independent agent can help you determine which optional coverages are right for your business. They’ll take the time to understand your business operations and vehicle use and find the optimal range at a fair price.
Injuries to Your Employees
You can face severe financial consequences if you or your employees get into a car accident while on business. Commercial auto insurance provides liability coverage for bodily injury and property damage to protect your company from these losses. In addition, many commercial policies offer physical damage coverage to reimburse for repairs on vehicles your company owns or leases. Some also include hired and non-owned auto coverage to protect your business if your employees use their cars or trucks to conduct business on behalf of the company or if they rent or borrow a vehicle.
Say one of your employees rear-ends a church van while running an errand for the company in his car. If the accident was severe, several people may be injured, and their medical expenses could easily exceed his low personal car insurance limits. A commercial policy will typically cover these costs and also pay for lawsuits related to the incident.