Does Your Business Need Commercial Auto Insurance? Find Out Now
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There are several different businesses that need commercial auto insurance including contractors, real estate agents, transportation services and any other enterprise where driving for business purposes is part of its daily operations. This essential coverage protects business vehicles in the event of an accident and with the right coverage, can insure equipment and inventory inside the vehicle.
Learn about the different commercial auto insurance coverages along with how you can get the right insurance for your business.
Does My Business Need Commercial Auto Insurance?
Commercial vehicle insurance is essential when a vehicle is used primarily for business purposes such as the transportation of goods, business equipment or passengers for a fee, like in delivery services or taxi operations. If your business uses a truck or even a fleet of trucks, then you should look into commercial truck insurance.
What Types of Commercial Auto Insurance Policies Are There?
Navigating through the array of auto insurance coverages for your business can be complex, so we’ve broken down the common insurance types available for your commercial vehicle:
- Liability coverage: If you're at fault in an accident, this coverage helps pay for injuries to others and damages to their property. It also covers legal expenses if you face a lawsuit.
- Collision coverage: This is essential for covering damages from accidents to your business vehicles, providing protection when another vehicle collides with your car or truck.
- Comprehensive coverage: This is your protection against non-collision incidents, such as damages from theft, weather events, vandalism or fire.
- Rental reimbursement: After an accident, this coverage steps in to cover the cost of a rental vehicle while your business vehicle is being repaired.
- Uninsured/underinsured motorist coverage: This covers injuries or damages incurred by your business vehicle occupants when the other driver is responsible for causing an accident but does not have insurance or not enough coverage to fully cover your losses.
- Personal injury protection (PIP): Regardless of who's at fault, PIP pays for medical expenses and lost income due to injuries sustained by occupants of your business vehicles in an accident.
- Medical payments coverage: This pays for medical or funeral expenses related to accident-caused injuries to occupants of your business vehicles, irrespective of fault.
Is There Specialized Coverage?
Commercial auto insurance often encompasses unique coverages not typically found in personal car insurance policies. These specialized options can include:
- Non-owned vehicle coverage: Protects you and your business when employees use their personal vehicles for business activities. This endorsement extends to rented or leased vehicles as well.
- Inland marine insurance: Covers equipment, cargo and other business property while being shipped over land.
- Trailer interchange coverage: Provides physical damage coverage for trailers your vehicle tows but the trailers are owned by other businesses.
What Types of Businesses Need Commercial Auto Insurance?
Commercial auto insurance is essential for a variety of businesses, particularly those that rely on vehicles for their day-to-day operations. Here are some types of businesses that typically need commercial auto insurance:
- Delivery services: Couriers, food delivery and package delivery businesses should have commercial auto insurance.
- Transportation services: Businesses that provide transportation services, including taxi services, limousine services, bus companies and shuttle services, need commercial auto insurance.
- Construction and contracting: Construction companies, contractors and other trades such as electricians, plumbers and landscapers typically use trucks, vans or other vehicles to transport tools, equipment and employees to various job sites, necessitating coverage.
- Sales and services businesses: Companies with sales representatives or service providers who travel extensively to meet clients, such as pharmaceutical sales, real estate agents or IT service providers, often need commercial auto insurance for their fleet of vehicles or for employees using their personal vehicles to travel to job sites.
When Is Commercial Auto Insurance Required?
Commercial auto insurance is required in most states when you have company-owned and operated vehicles. However, it may be the case that your state won't require you to have a commercial auto insurance policy. Virginia, for example, allows businesses to forgo coverage as long as they pay an uninsured motorist fee.
Can I Use Personal Auto Insurance for My Business?
A personal auto insurance policy will not apply to business-use vehicles. You need to have commercial coverage if you’re driving a vehicle for business-related purposes.
How Much Does Commercial Car Insurance Cost?
Similar to shopping for personal auto insurance, rates will vary by company. For example, business owners who shop with Next Insurance can pay as little as $12.50 per month to over $200 for commercial auto insurance. Factors that dictate the cost of commercial auto coverage include your industry, the number of vehicles you have, your claims history and your location. You have the option to purchase this plan individually or through a commercial package policy that would include several other coverages.
How To Get Commercial Auto Insurance for Your Business
When exploring insurance options, it's advisable to gather three to five quotes from various providers. These insurers will need details about your enterprise, including your field/industry, the vehicle to be insured, the business location and the total number of vehicles covered.
Using an insurance marketplace SmartFinancial lets you skip the tedious process of providing this information for each company. Instead, you complete one questionnaire regarding your insurance requirements and budget and you'll get paired with a tailored commercial auto insurance policy. Get your free commercial auto insurance quote today!