Commercial auto insurance is very similar to personal auto insurance. It covers, liability, comprehensive, collision and other types of coverage that are specific to everyday business vehicle use. A commercial auto policy is designed to protect your business from significant losses that could affect your company’s financial bottom line.
Commercial auto insurance policies combine several different types of coverage some are required and some are optional. A typical policy includes some combination of the following:
Bodily injury liability: This portion of the commercial auto policy covers harm to others in an accident caused by you or your employee. Bodily injury coverage will provide compensation for medical costs, funeral costs if necessary, and the costs associated with a lawsuit. The amount of compensation your company receives depends upon the limit set on your bodily injury liability coverage, as well as your deductible.
Property damage liability: This coverage will pay the costs to repair property damage caused by you or your employee. The amount of coverage you receive is based on the limits you set and your deductibles. It is a good idea to work closely with an independent agent to assess your risks as well as the potential costs of injury, property damage and legal fees. For the best protection, consider buying a commercial umbrella liability policy.
Collision: As with your personal auto policy, a good commercial auto policy should include adequate collision coverage to pay for the damage to your vehicles in the event you or your employees cause an accident.
Comprehensive: Known also as “other than collision,” your comprehensive coverage is an important protection for damage to your vehicle or loss due to causes other than collision. These causes can include weather, theft and vandalism.
Uninsured and underinsured motorists: If one of your drivers is in an accident caused by another motorist who does not have adequate insurance, this coverage will help to pay for damages and injuries to your vehicle and your driver, up to the limits set on your policy.
Medical payments: This coverage pays for medical and/or funeral expenses for you, your drivers and passengers after an accident.
An optional coverage you might also purchase is for a rental replacement auto if your company car has been in an accident. You could also add towing and roadside assistance to your policy.
The right commercial insurance can protect you the business owner and all of the drivers in your commercial vehicles when in an accident. One of the most critical ways to protect your company is by having adequate liability coverage in case you or one of your employees causes an accident that injures another person or damages property.