Why Auto Insurance for Commercial Vehicles Is Needed

Many businesses use various types of vehicles to support their operations. Most use some type of vehicle (food truck, delivery van, passenger vehicle) for supply pickup, product delivery, and business tasks assigned to employees during business hours. And they all need to be protected by commercial coverage. Find out more about this coverage and get online quotes for auto insurance.

Vehicles used primarily for business purposes need to be insured under a commercial auto policy, even when personally owned by the business owner. With the majority of personal auto policies, once a vehicle is designated for business use, it may be excluded from coverage in the policy, leaving the owner exposed for liability.

Similar to the personal auto policy, the commercial auto policy is a package policy that includes liability coverage as well as physical damage coverage. It differs from personal auto coverage due to the business use of a vehicle. These are the main differences

  • A broad range of vehicle types and sizes can be covered.
  • Higher liability limits are available.
  • Most insurers do not have a limit on the number of vehicles covered on the policy. These is ideal for businesses with a large fleet of vehicles.
  • Most insurers do not have a limit on the number of drivers on the policy.
  • There are various endorsements available to increase the type of coverages.

Commercial auto insurance offers coverage on a first party and a third party basis:

  • Bodily Injury Liability: This coverage provides financial protection for your business if an insured driver is involved in an at-fault accident. The coverage will pay for medical expenses, lost wages, and funeral expenses for a third party if your business is found liable.
  • Property Damage Liability: It pays to repair or replace vehicles or other property when an insured driver is found liable for an at-fault accident or event.
  • Medical Payments: Will pay medical expenses of an insured driver and passenger if injured in an accident no matter who is at fault.
  • Uninsured/Underinsured Motorist Coverage (UM): UM coverage pays in the event an insured driver is injured by another motorist, who is uninsured or does not carry enough insurance.
  • Collision Coverage: The collision coverage on the policy pays to repair or replace the insured vehicle in the event of an accident.
  • Comprehensive Coverage: It┬ápays to repair or replace an insured vehicle if damaged by events other than a collision, such as vandalism, hail damage, or windshield damage and will pay to replace the vehicle if stolen and unrecovered.

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