Commercial Auto Insurance: A Guide

If you are a business owner with employees who use their own vehicles for company purposes, you need commercial auto insurance. This type of policy covers the liability and physical…

August 30, 2022

Written by Justin Sloan

If you are a business owner with employees who use their own vehicles for company purposes, you need commercial auto insurance. This type of policy covers the liability and physical damage risks associated with business-related vehicle use. Commercial vehicles are subjected to greater hazards than private vehicles, which is why they need different insurance. 

 

In this blog post, we will explain what commercial auto insurance includes and which vehicles are covered. We will also discuss some of the additional benefits often included in a commercial auto policy.

 

How To Tell If You Need Commercial Auto Insurance?

 

Commercial auto insurance is more about the protection of a company’s assets as compared to just describing a policy for a vehicle. Let us take a look at what exactly commercial auto insurance covers and what you need to keep in mind when you go out looking for one. 

 

One of the first questions you should ask yourself is if your business owns any vehicles that need insurance. If it does, then a commercial vehicle policy is definitely necessary. Some examples include company cars or trucks used to transport goods or employee tools and equipment. However, even if your business doesn’t own any vehicles at all—but employees still use their personal cars for work purposes—then you will also need to have this type of coverage on hand just in case something happens while they’re using them (i.e., an accident).

 

Can Personal Auto Policy Cover Business Use?

Some personal auto policies will provide coverage for business use. Still, the terms of that coverage vary greatly from policy to policy. It is important to read your personal auto insurance policy carefully to see if you are covered for business use and what activities are excluded. If you are not covered for business use or the coverage does not apply to the activities in which you engage, then you will need to purchase a Commercial Auto policy.

 

What Does Auto Insurance Cover?

Just like personal automobile policies, commercial policies come with various coverages. The main ones are liability, physical damage, medical payments, driver injury, and damage to someone’s property.

 

In addition, businesses often need extras such as towing coverage for their fleets or hire-and-reward policies if they are transporting goods regularly. 

 

Here is an overview of what each one entails:

 

Liability

This type will protect you from having any legal expenses incurred due to accidents that occur while driving your vehicle(s) for business purposes (i.e., hitting another car). Physical damage – This covers the costs associated with repairing damages caused by collisions or vandalism; it also includes replacement fees if necessary Medical payments – In case drivers get hurt during an accident and require medical treatment, this policy will cover those bills upfront until they can receive compensation through workers’ compensation policies later on. 

 

Driver Injury

In addition to medical payments, driver injury protection will also pay for hospital stays and rehabilitation costs in case of a catastrophic accident where someone is critically injured or killed while driving their vehicle as part of their job duties (i.e., because they were distracted by work).  

 

Damage To Property That Belongs To Others

If your business owns property such as buildings or warehouses, then this type of insurance can help offset losses incurred due to fire damage caused by the negligence of one’s employees while operating vehicles owned by company assets such as trucks used for deliveries/pickups from clients, etc.

 

Additionally, if any injuries suffered during these accidents result in lawsuits against your firm, then liability coverage would cover the defense costs and any damages awarded.

 

Physical Damage

This covers the costs associated with repairing damages caused by collisions or vandalism; it also includes replacement fees if necessary.

 

Medical Payments

In case drivers get hurt during an accident and require medical treatment, this policy will cover those bills upfront until they can receive compensation through workers’ compensation policies later on.

 

Additional Benefits

In addition to the standard coverage options, many businesses opt for additional benefits to their commercial auto policies. This can include things like roadside assistance, rental car reimbursement, or even death benefits for employees who die due to an accident while working.

 

It’s always best to consult with your insurance agent about which extra benefits may be best suited for your company’s needs before purchasing them.

 

Commercial Auto Insurance Cost

The cost of business auto insurance is determined by the insurer and its requirements, but most policies start at around $190 per month for liability coverage alone. It’s important to read over your policy carefully, so you know exactly what is and isn’t covered in case something happens while driving for work-related purposes. 

 

Additional protection such as uninsured motorist benefits may be purchased separately. Businesses often receive discounts for good driving history and multiple vehicles owned by one person.

 

What Kind Of Vehicles Does Commercial Auto Insurance Cover? 

Commercial auto insurance generally covers passenger cars, vans, pickup trucks, and box trucks. However, it is important to check with your insurer to ensure that the specific type of vehicle you will be using for business purposes is covered. Some insurers may also cover food trucks or other types of commercial vehicles.

 

It’s important to remember that just because a vehicle is used for business purposes doesn’t mean it automatically qualifies for coverage under a commercial auto policy. The vehicle must be specifically listed on the policy to be covered.

 

Passenger Car coverage:  A policy will cover any authorized driver of the car. The insurance company usually won’t ask who was driving the car at the time of an accident.

 

Van coverage: A policy will cover any authorized driver of the van.

 

Pickup truck coverage: A policy will cover any authorized pickup truck driver, but there may be restrictions on what type of cargo the truck can carry.

 

Box Truck coverage: Box trucks are generally covered under a standard commercial auto insurance policy, but there may be some restrictions on what types of goods or materials can be transported in them.

 

Food Truck Coverage: Food trucks are typically covered by standard commercial auto policies, but it is important to check with your insurer to make sure that all activities related to running the business will be covered.

 

Commercial Auto Insurance Coverage Limits

The maximum amount of coverage that a commercial auto insurance policy can provide is a minimum of $300,000 for liability and property damage per accident (bodily injury or death). This limit does not include uninsured motorist benefits. 

 

The liability coverage limit per person is $100,000. The minimum property damage amount covered by a commercial auto insurance policy is $20,000 per accident (bodily injury or death) and the maximum property damage amount covered by this type of policy is also $300,000 for each accident (bodily injury or death).

 

How Much Liability Coverage Do I Need for My Company?

A business auto insurance limit of $1 million is typical, with $500k as the minimal requirement. Given the amount of additional security it provides, the higher limit doesn’t add much to the cost.

 

Is a Business Umbrella Insurance Coverage Good for Cars?

Umbrella Insurance Services protects you against financial losses that may occur due to an accident. If you have enough liability coverage, this type of commercial insurance is unnecessary. You would need to pay out of pocket for liability claims that exceeded your coverage limits if you didn’t have this sort of business insurance.

If the umbrella includes the auto liability policy as an underlying coverage for which it provides coverage, it will protect owned, hired, and non-owned cars.

 

Is It Necessary To Provide Coverage For Employees Who Drive Their Own Cars For Business?

Yes, most Commercial Auto Insurance policies do not include coverage for employees who drive their own vehicles on company time. If you want to be covered in these situations, you will need to add an endorsement for Hired and Non-Owned auto liability. This type of policy covers your business if an employee causes injury or damage while driving their personal vehicle on company time.

 

 If they are involved in a car accident, and it is determined that the employer was at fault (or even partially at fault), this coverage would apply under certain conditions such as negligent supervision over employees’ use of personal autos during work hours; providing training or instructions regarding the safe operation of motorized equipment; and failure to provide adequate safety equipment like seatbelts, airbags, etc. 

 

Providing Commercial Auto Insurance in Connecticut 

Choosing the correct commercial auto insurance can be a difficult task. We at Nesso Insurance aim to make the process as simple and painless as possible. We’ll work alongside you to help you find the right fit for you. As your business grows, so do your needs and risks, which is why as a rule of thumb you should review commercial auto insurance no less than once a year.

 

Our Nesso Group professionals will gather all of the necessary data to assess risk, identify coverage gaps, and give you a precise estimate so that you have all of the information before making your decision regarding your commercial auto insurance, or if you’re interested, we can help you with home insurance as well. To get started, contact us right away.

 

CONTACT US NOW

Subscribe To Our Blog

Suscribe

Read More Entries

Let’s Talk About
What’s Important To You

Nesso
Solutions

Our approach to integrated solutions and comprehensive services alleviates stress and elevates success. We provide guidance across multi-dimensional areas of expertise for individuals and businesses. You can trust that we’re working together with your best interest in mind.

Image Item

Nesso
Tax

Image Item

Nesso
Accounting

Image Item

Nesso
Wealth

Image Item

Nesso
Insurance

Image Item

Nesso
Medicare

Image Item

Nesso
Benefits

Call Now Button