How Commercial Auto Insurance Works?

Commercial auto insurance is designed to insure vehicles used for business purposes. It stands in to cover these vehicles because of the gap left by personal auto insurance, which generally becomes void if a policyholder attempts to file a claim for a business-owned vehicle or business-related accident. 

 Anyone from a pizza delivery driver to a chemical company may need vehicles to transfer their product and employees to various places, making transportation an important business expense. Commercial auto insurance likewise is an essential part of your operating costs, regardless of how infrequently you might have to file a claim against it. It’s there to protect you in worst-case scenarios, whenever they might arise.  

Though all commercial auto policies vary, it’s important to note that they generally will provide a core set of benefits, each of which is customizable to the individual policyholder’s needs. Here’s more about what coverage options you can expect to be provided by a policy, and how to get the coverage that will take care of your employees and commercial vehicles on the road. 

Standard Protections 

What commercial auto coverage does is essentially to take the benefits of standard auto insurance and expand upon them. It will make coverage, such as liability benefits, more generous, which can make them more effective in protecting a business entity (rather than an individual) from financial losses. For example, under commercial auto insurance, you'll generally get loading and unloading liability coverage, in case a covered employee damages property or expensive merchandise when transporting them.  

These additional protections can be crucial for safeguarding a business from financial ruin. They’re also handy if you want to limit disruptions to your business following commercial vehicle accidents. If your vehicle is damaged by vandalism or from an unexpected weather event, you'll have the means to repair or replace it quickly. Therefore, you won’t have to waste time (and money) simply because you can’t operate a vehicle that is out of commission. 

Customizable Policies 

You can alter your commercial auto policy depending on what you need from your benefits in the first place.  

Some companies will only need to insure one or two vehicles, while others may require coverage for a whole fleet. Some business owners even extend their coverage with the help of an umbrella policy. This policy is not strictly necessary, but it can supplement your coverage when your policy’s liability insurance limits run out. So, if your policy covers up to $300,000 in bodily injury costs, umbrella insurance will extend that coverage in the event  that a third party’s hospital bills surpass that $300,000 limit. 

Commercial auto insurance is typically required for most businesses. If it's found that a personal vehicle was being used largely for business purposes, an insurance company may deny the claim. To get the right policy for your business, discuss individual circumstances with your agent. The more specific you are about everything from your budget to your responsibilities, the easier it will be to find a policy.