Commercial Auto Insurance

Understanding Commercial Auto Insurance

In most states, any vehicle on the road needs to have auto insurance coverage. This requirement extends to vehicles used for business purposes. But those vehicles aren’t covered under a personal auto insurance policy. Instead, any vehicles used for business purposes needs commercial auto insurance. It doesn’t matter if your business has one vehicle or many, they all need insurance coverage.

Does My Business Need Coverage?

Does your business use any vehicles in the operation of the business? If so, then the answer is yes, you do need commercial auto insurance. A package delivery company would need coverage for all of its delivery trucks. A florist would need coverage for all of its delivery vans. A grocery store that delivers groceries would need coverage as well. Any vehicle used for business purposes needs coverage.

What are the Specifics of Coverage?

Commercial auto insurance works like regular car insurance. The difference is it covers business situations. But just like with regular car insurance, the business owner files a claim should an accident occur. The insurance company can possibly deny your claim, but they usually won’t as long as the incident is covered by the policy.

Coverage for Commercial Vehicles

If you’re familiar with personal auto insurance, then you’re also familiar with what’s offered under commercial coverage.

The comprehensive option pays for damages caused by events such as fire, flood, vandalism, and theft. But since policies often vary, you should verify exactly what your policy includes.

The collision option is for when you want coverage against all types of collisions. If your vehicle collides with another object, then you can file an insurance claim. The matter of fault is generally not an issue here.

Liability is the least amount of coverage you can get. It helps pay for property and bodily harm when you’re at fault. This coverage is important because if your business faces a lawsuit, insurance will help with legal fees and defense.

Medical payments and personal injury coverage is important because it pays medical expenses for drivers or passengers hurt in a company vehicle. The matter of fault is generally not an issue here either.

Coverage is Beneficial

First of all, commercial auto insurance is likely required in your state. So going without it is breaking the law. And second, coverage offers valuable protection to your company. There are really no cons to having this coverage. It’s a smart business move.