How Does Commercial Auto Insurance Work?

Commercial auto insurance is a form of business insurance that covers the vehicles used in conducting business. This insurance offers physical and liability coverages for damages caused by accidents that involve business vehicles and offer certain compensation to inhabitants of the vehicle who are injured in an accident. 

Overall, if your business owns a vehicle or several vehicles, this policy can offer valuable financial protection to you and your employees.

How Commercial Auto Insurance Works

This form of insurance is designed for conditions that are specific to your business and its needs. A commercial auto insurance policy can include coverage for both collision damage and liability. The liability coverage limits are typically higher than what a personal auto insurance policy offers. This can be a good thing if you are worried about your business getting sued due to an accident involving you or one of your employees. Aside from offering coverage for collision and liability, some commercial auto insurance policies can also include coverage for items such as:

  • Employee vehicles used exclusively for business purposes
  • Personal injury claims that result from an accident
  • Damage related to vandalism, theft, weather events, or falling objects
  • Damages caused by underinsured or uninsured drivers
  • Trailers used in union with business vehicles
  • Rental vehicles used to transport clients or employee
  • The cost of rental vehicles needed to provide temporary replacement for a vehicle for your business

Your commercial auto insurance policy also covers things inside business vehicles. For instance, assuming you run a contracting business and transport tools in your work vehicle. If the working tools in the van are stolen, the commercial auto insurance policy may cover the items.

Who Needs Commercial Auto Insurance?

If you only use your car to drive to and from work, you don’t need to purchase a commercial auto insurance policy. If you operate a business that relies on vehicles to run, then you likely need to purchase commercial auto insurance to cover them. However, it can be quite difficult to be certain whether you need to purchase this policy or not.

For instance, while all the vehicles owned by a company need commercial auto insurance policies, some personal vehicles may also need this policy, depending on the use and type of vehicle. If you use your personal vehicles to transport goods, people, or equipment for work purposes, then this policy is required.

Also, some vehicles must be insured by a commercial auto insurance policy regardless of the ownership or use. For instance, if your vehicle has a load capacity of 2,000 pounds or more or a gross weight of 10,000 pounds, then you need to purchase a commercial auto insurance policy.

We Can Help! 

For more information about commercial auto insurance and if it’s right for you, don’t hesitate to contact All Things Insurance to speak to an experienced insurance expert.