2024-01-01 · business, auto

Commercial Auto Coverage

Overview

Commercial auto insurance protects businesses that own, lease, or use vehicles for work. It pays for liability when drivers cause injuries or property damage and can cover damage to company vehicles depending on the policy.

What it covers

• Liability coverage: pays for injuries and property damage your driver causes.
• Collision coverage: repairs company vehicles after crashes.
• Comprehensive coverage: handles theft, vandalism, fire, or weather losses.
• Medical payments or PIP: helps cover injuries to drivers and passengers.
• Uninsured/underinsured motorist: protects you if the at-fault driver has little or no insurance.

Who needs it

• Businesses with company-owned cars, vans, or trucks.
• Contractors and delivery services with regular road exposure.
• Employers who require employees to drive for work and need broader liability protection.

Common exclusions and limits

• Personal-use vehicles without proper business endorsements.
• Intentional or illegal acts by drivers.
• Wear and tear or mechanical breakdowns.
• Coverage caps for liability and medical payments.

Cost drivers

• Vehicle type and use: heavy-duty trucks and frequent driving raise premiums.
• Driver history: violations and claims increase costs.
• Operating territory: urban routes or high-crime areas can be pricier.
• Deductibles and limits: higher deductibles reduce premiums, higher limits raise them.

How to compare policies

1. Match liability limits to your contracts and assets.
2. Check who is covered: named drivers, anyone driving, or permissive use.
3. Review supplemental coverages like hired/non-owned auto and rental reimbursement.
4. Ask about safety discounts for telematics or driver training programs.

Frequently asked questions

Do I need hired and non-owned auto coverage? If employees use personal or rented vehicles for work, this coverage can protect your business from liability claims.

How is a claim handled? Report the incident quickly, document damage and injuries, and follow your insurer’s instructions for repairs or legal response.