What Is Commercial Auto Insurance?
Commercial auto insurance covers an organization's liability and the cost to repair or replace a damaged vehicle owned, maintained, or used for business purposes.
Why do you need commercial auto insurance?
Your personal auto policy excludes coverage for many types of business uses of private business vehicles. Additionally, a personal auto policy cannot be issued to a business or provide coverage for commercial vehicles. Yet most states require drivers to purchase liability insurance before they get on the road. As a result, business owners must purchase commercial auto insurance.
You may need commercial auto insurance if you answer "Yes" to any of the following questions:
Is your vehicle owned, maintained, or used for business purposes?
Is your vehicle a commercial vehicle such as a large truck, box truck, trailer, semitrailer, or tractor?
Is your vehicle used to transport property or passengers for a fee?
Is your business an auto repair shop?
Does your business:
- Own its vehicles?
- Lease, hire, rent, or borrow its vehicles?
- Have employees who use their private vehicles for business use?
- Use mobile equipment that falls under state compulsory insurance laws?
What does commercial auto insurance cover?
Commercial auto insurance covers three areas of risk:
If an employee causes an auto accident while working, the liability can fall on both the employee and the employer. Commercial auto insurance covers the business's liability.
Fixing damage to a vehicle can be costly for more than one reason. Commercial auto insurance covers the cost to repair or replace the vehicle (less depreciation), as well as the cost to rent a replacement auto so your business can continue operating.
Commercial auto insurance can provide medical expense coverage and uninsured motorists coverage to individuals insured on the policy.
How much is commercial auto insurance?
Every commercial auto policy is unique, and varies depending on:
- The number of vehicles insured
- The types of vehicles owned, maintained, or used
- The distance driven
- The ownership of the vehicle
Some other common rating factors for commercial auto policies include:
- Policy limit
And, for trucks, trailers, semitrailers, and tractors:
- Vehicle's size class (light, medium, heavy)
- Business type (service, commercial, or retail)
- Radius driven