What Does Commercial Auto Insurance Cover?

Commercial auto insurance is similar to personal auto insurance in terms of basic coverage, such as liability, comprehensive, collision, and other types of coverage specific to business vehicle use. The primary purpose of a commercial auto policy is to safeguard your business from substantial losses that could have a significant impact on its financial well-being.

A commercial auto insurance policy combines various types of coverage, some of which are required and others that are optional. A typical policy includes a combination of the following:

• Bodily injury liability: This coverage provides compensation for harm caused to others in an accident involving you or your employees. It covers medical costs, funeral expenses if necessary, and legal fees associated with a lawsuit. The compensation amount depends on the limit set for bodily injury liability coverage and the deductible.

• Property damage liability: This coverage pays for the costs of repairing property damage caused by you or your employees. The coverage amount is determined by the limits and deductibles you choose. It's advisable to work closely with an independent agent to assess your risks, potential costs of injury, property damage, and legal fees. Consider purchasing a commercial umbrella liability policy for enhanced protection.

• Collision: Similar to personal auto policies, a comprehensive commercial auto policy should include adequate collision coverage to pay for damage to your vehicles if you or your employees cause an accident.

• Comprehensive: Also known as "other than collision" coverage, comprehensive protection is crucial for damage or loss to your vehicle caused by factors other than collisions. This can include weather events, theft, and vandalism.

• Uninsured and underinsured motorists: If one of your drivers is involved in an accident caused by an inadequately insured motorist, this coverage helps pay for damages and injuries to your vehicle and driver, up to the limits set in your policy.

• Medical payments: This coverage takes care of medical and/or funeral expenses for you, your drivers, and passengers following an accident.

• Additional optional coverage: Depending on your insurance company and the state your business operates in, you may have access to a wide range of additional coverage options. These can include coverage for employees driving non-owned vehicles, rental replacement auto coverage, towing and roadside assistance, and specific coverage for loading and unloading cargo to address increased liability risks.

Having the appropriate commercial insurance protects you, your business, and all drivers operating commercial vehicles (cars, vans, pickup trucks, or limos) in the event of an accident. Adequate liability coverage is especially critical to protect your company in case you or one of your employees causes an accident that injures another person or damages their property.