What Is Commercial Auto Insurance?
Commercial auto insurance for businesses is the financial protection you need for the vehicles you primarily use to run your business. Just as you have protection for your personal car, your company’s trucks or vans need the same insurance coverage. Commercial auto insurance covers all state-registered vehicles that your business owns. There are options to include all vehicles that your business hires or leases to use for business reasons. Most companies select the option that covers all vehicles the business uses, including those that it does not own, since employees may use their personal vehicles for business activities. What Does Commercial Auto Insurance Cover? Business auto insurance has standard, state-sanctioned coverage and optional coverage that you may apply for at your discretion. Standard Coverage
- Bodily Injury Liability: This coverage pays for the medical expenses, rehabilitation costs, and legal fees for a person whom you have injured, disabled, or killed after a vehicular accident while on duty.
- Property Damage Liability: This coverage financially protects you if your business vehicle accidentally damages another person’s property. Most cases may provide financial assistance for lawsuit settlements.
- Combined Single Limit (CSL) Liability: This business auto policy coverage combines the limits for bodily injury and property damage into one limit. CSLs offer higher limits because they cover two types of liabilities in one policy, unlike personal auto policies, which have split limits for bodily injury and property damage.
- Towing and Labor: This optional coverage pays for the labor costs for towing your covered vehicle. Events that disable vehicles include leaving keys in a car, dead batteries, flat tires, or running out of gas in the middle of the road.
- Medical Payments: This coverage pays for the reasonable medical or funeral expenses due to a vehicular accident, regardless of fault. Medical payment coverage usually covers drivers and passengers occupying covered vehicles.
- Collision Coverage: This pays for the losses that result from damages upon impact with buildings, objects, or other vehicles. Collision coverage can pay the repair costs (in part) for any covered vehicle in your business. Although this coverage is optional, you may need to apply for collision coverage if your business vehicle is financed.
- Comprehensive Coverage: Your business automobile needs further financial protection from factors other than collision. Comprehensive coverage pays the repair costs or the actual cash value (ACV) of your vehicle in the event of covered perils such as fire, flood, theft, vandalism, or contact with an animal. Like collision coverage, financed vehicles may require comprehensive coverage.
- Hired Auto Coverage: This optional coverage provides liability insurance for the vehicles your company leases, hires, rents, or borrows for business purposes. Hired auto coverage may cover legal fees should your hired vehicle cause accidents that lead to lawsuits.
- Non-Owned Auto Coverage: This coverage protects your employees who use their personal vehicles to conduct your company’s business. Non-owned auto coverage would apply to sales employees who use their car instead of a company vehicle or administrative staff members who run company errands.
- Extended Transportation Expense Coverage (Rental Reimbursement): This optional coverage can pay for your company’s lost revenue while a vehicle is under repair or temporarily disabled.