All sizes of businesses look to the Commercial Auto policy to obtain appropriate coverage for their vehicles, whether they are cars, vans, trucks, buses or semi-trucks. The Commercial Auto policy provides the limits required by businesses with no limitation on the number of vehicles.
One-person operations such as contractors and delivery services are usually under the misconception that since they are using their personal vehicle, a commercial auto policy is not required. The truth is, almost every personal auto policy excludes coverage for any vehicle used for business. This is a mistake that can lead to serious financial problems. If you are using your personal vehicle for any kind of business, it is wise to check with your insurance company to see if there is an exclusion that will apply.
Like the Personal Auto Policy, a Commercial Auto Policy is sold as a package of coverages with optional coverages available through endorsement:
Bodily Injury and Property Damage Liability
This coverage protects the business from 3rd party liability claims in the event a company vehicle is involved in an at-fault accident. It can be purchased in “split limits” like the personal auto policy or as “combined single limits” which provides a single limit of coverage for bodily injury and property damage.
Your Medical Payments coverage provides benefits for medical expenses for an insured driver and any passenger in your vehicle. Proof of legal liability is not required to collect under the Medical Payments coverage.
Collision coverage pays for damages to your vehicle or replacement if it is considered a total loss. All claims paid are subject to the deductible you selected at the time of policy purchase.
Comprehensive Coverage (Comp) pays if a vehicle is stolen or vandalized or if damaged by causes other than a collision, such as a tree falling on the vehicle or the windshield is cracked by a rock or other object.
Uninsured/Underinsured Motorist Coverage
Uninsured/Underinsured Motorist (UM) is first party coverage that pays injury expenses for a named insured if involved in an accident and the at-fault (other) party does not carry sufficient limits to pay injuries or is uninsured, or if the accident is a hit and run.
Optional Coverages Available
Different types of businesses require different coverages, and there are many optional coverages available to make certain your business is properly protected:
- Non-owned auto liability – This endorsement extends your liability coverage for vehicles that are used for business that are not owned by the company such as an employee’s vehicle.
- Hired auto liability – With the hired auto liability endorsement, the liability coverage is extended to vehicles that you rent or lease.
- Hired auto physical damage – Provides physical damage coverage for vehicles that the business rents or leases.
- Trailer Interchange – This endorsement provides coverage for non-owned trailers used under a trailer interchange agreement.
- Towing and labor – Reimburses the company for roadside assistance in the event of a breakdown.
- Rental Reimbursement – Helps cover the cost to replace a vehicle under repair temporarily as a result of an accident.
- Motor Truck Cargo – Provides coverage for owned and non-owned cargo while in transit on a company vehicle.
Although many commercial insurance companies offer many of the same coverages, it is important to discuss every coverage with an agent or broker to be sure that your individual company’s risks are mitigated properly.