- Needed to cover cars, trucks and vans used in conducting a business
- Most personal auto programs will not cover vehicles used for work
- Non-Owned/Hired Auto policy needed if employees use their own or rented vehicles
- Coverage is similar to a personal auto policy
ommercial vehicle insurance is needed to cover the cars, trucks, and vans used in conducting your business. Large fleets as well as small businesses should be properly covered by a commercial auto insurance policy. This coverage is a policy of physical damage and liability coverages for amounts, situations, and usage not covered by a personal auto policy.
Why not use my personal auto policy to cover my business vehicles?
Many contractors are tempted to use their personal auto policy to cover their work vehicles. However, personal policies have many exclusions written into them for accidents involving vehicles used for work. It is likely that a personal policy will not provide coverage if any of the following situations exist:
- The vehicle is ever driven by employees
- You have signs on the vehicle
- The primary use of the vehicle is for commercial purposes
- The vehicle is not normally used as a personal vehicle, such as a large truck
- The vehicle is very heavy and not considered a personal or recreational vehicle
- Equipment is permanently attached to the vehicle
Even if you do not own a single vehicle under the business name, you still need a policy that is called Non-Owned/Hired Auto Liability if there is ever a time that your employees use their own or rented vehicles for the business.
What does a Commercial Auto policy cover?
Commercial auto insurance coverages are very similar to the coverages provided by a personal auto policy. There six main parts of the auto policy:
- Bodily Injury Liability Coverage
Pays for bodily injury or death resulting from an accident for which you are at fault and provides you with a legal defense - Property Damage Liability Coverage
Provides you with protection if your car accidently damages another person’s property. It also provides you with a legal defense - Medical Payments Coverage
Usually pays for the medical expenses of the driver and passengers in your car incurred as a result of a covered accident regardless of fault - Uninsured/Underinsured Motorist Coverage
Pays for your injuries and, in some circumstances, certain property damage caused by an uninsured or a hit-and-run driver - Comprehensive physical damage coverage
Pays for damage to your car from theft, vandalism, flood, fire, and other covered perils - Collision coverage
Pays for damage to your car when it hits or is hit by another object
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