Auto insurance is the one thing standing between you and a huge repair bill. When you’re in an accident, your policy covers the damage you do to other vehicles and property as well as any injuries that other drivers and their passengers suffer. Your auto policy does not cover anything that happens when you use your vehicle for work. As a business owner, you also need a commercial policy that covers all of the vehicles in your fleet and the workers who operate them. You should make sure you understand how commercial auto insurance works before you sign up for a policy.
Vehicles Covered
One big question you might have is about the vehicles covered. A commercial policy covers any vehicles used for commercial purposes. Do you have tractors on a farm that you use to transport goods? Maybe you have a fleet of trucks that drive to cities nearby and in other states. Your policy will cover all of those vehicles as well as trucks of other sizes such as pickup and box trucks. You get coverage for cargo and passenger vans, too. If you have workers who drive sedans and other types of cars, you can pick a policy that covers them.
Physical Damage
Commercial auto insurance pays for any physical damage done to your work vehicles and any other property involved in the accident. You can usually choose between collision and comprehensive coverage. With collision coverage, the insurer pays for damage that occurs during accidents and collisions, such as when an employee hits another vehicle on the road. Comprehensive coverage lets you file claims for incidents you had no control over. Not only will the insurer pay out if a storm damages a car in your fleet, but you can also claim a complete loss if someone steals a vehicle.
Liability Claims
When you own a business, you need a policy with liability coverage. Liability insurance pays for damages and injuries when you or someone else causes an accident. Bodily injury liability is a common form that comes in handy when someone who works for you causes an accident that leads to injuries. Anyone involved in the accident can file against your insurer and seek compensation for their hospital bills. Property damage liability pays for any damage to personal property, such as a vehicle or a bicycle. Commercial liability coverage pays out for damages caused by you or anyone listed on your policy.
When You Need Commercial Auto Insurance
You need commercial auto insurance if you have any vehicles that you use for business or work purposes. If you have a vehicle registered in your state as a commercial vehicle, you also need this type of policy. Even if you have a car or truck registered as a personal vehicle, you need commercial insurance if it has a commercial tag on it. It’s also helpful to invest in a policy if you have employees who use their personal vehicles for your business. They might run errands or pick up clients while on the clock.
How Commercial Insurance Works
Commercial auto insurance works in the same way that your personal insurance does. You sign up for a policy that covers all of your work vehicles. While you have the option of paying by the month, you often qualify for a discount when you pay for six months or a year of coverage upfront. Milepost insurance and other insurers require that you call after an incident and file a claim. You pay your deductible and allow the insurer to cover any leftover costs. The insurer can also negotiate costs for you to try and reduce the amount they pay out.
You Need Commercial Auto Insurance
You must have commercial auto insurance if you have even a single car, truck, van, or SUV that you use for work. Most personal policies will not cover any damages you incur for accidents that happened while you were on the clock. It helps you avoid lawsuits filed by injured parties. As helpful as the right policy is, you need to make sure you have the right type of coverage and that your policy covers all of your vehicles as well as how to file a claim with your insurer.
