What is commerical auto insurance?
Commercial auto insurance covers vehicles that are owned by or used for a business. Commercial vehicles require a separate policy because they’re typically exposed to more risk than personal vehicles.
Who Needs It?
You need commercial auto insurance if you own or lease a vehicle in the name of your business. Most states require all vehicles to carry a minimal amount of insurance and commercial vehicles cannot be insured by personal auto insurance policies, so you may not have a choice.
Commercial auto insurance isn’t just for industrial vehicles, like semis or dump trucks, and vehicles owned by your business. You might want to consider insuring your personal vehicle with commercial auto insurance.
If you are a contractor who drives your personal truck to the site every day; your vehicle is driven by employees, co-workers or clients; or your vehicle is used to transport clients, goods, materials or equipment, then you may want to use commercial auto insurance for your vehicle.
Commercial auto insurance covers two basic categories: liability and property.
Commercial Auto Liability Insurance
Liability insurance protects your business in the event of injury or damage to a third party or their property.
Bodily injury liability insurance provides coverage if you or your employee injure someone in a car crash and are found to be at fault. Expenses covered include medical expenses, legal fees, loss of income and other compensation.
Property damage liability insurance covers you if you or an employee cause property damage while driving and are found to be at fault, whether it is to another car, a building or a fence.
Commercial Auto Property Insurance
This coverage protects the value of your vehicle in the event of damage. There are two types here, as well.
Collision coverage pays for damage to your vehicle that occurs during an accident, whether you caused the accident or not.
Comprehensive physical damage covers the cost of repairing or replacing your vehicle in the event of theft or damage from vandalism, falling objects, fire, glass breakage, etc.
Depending on your situation, you may want to consider investing in additional types of auto insurance that are less standard.
About one in seven drivers in the US is uninsured, despite the illegality of that in most states. If an uninsured driver causes an accident, they may not be able to pay for the damages. Uninsured motorist coverages ensures that your insurance carrier picks up the slack, not you.
Hired & Non-Owned Auto
If you have employees who drive their personal vehicles for business purposes, you hire cars to pick up or drive clients, you hire construction vehicles or send employees on business trips where they rent vehicles, you should consider hired auto insurance. This insurance simply supplements existing liability insurance. In cases of serious crashes, this can cover medical expenses and damage to third party vehicles or property caused by you or your employees with a hired vehicle.
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