A commercial auto insurance policy is for businesses who maintain a fleet of cars, trucks, vans or other vehicles. The policy can cover leased or owned vehicles. This policy is also useful for businesses that have employees drive their own cars for company business. These policies are required in many states, but in other situations businesses may decide to purchase auto insurance to protect the business from financial ruin.
Commercial insurance protects the owner from personal liability in case of an accident. This can include repair costs, legal fees, medical bills, and rental reimbursement. With commercial insurance, businesses may have much more risk for accidents to happen; especially if the company owns a fleet of vehicles. Large trucks are an especially important set of vehicles to cover. The costs from one accident in a tractor trailer vehicle could devastate a small business.
As an example, plumbers John and Ted ran a red light on their way to a job and hit a bus. Their company Plumbers Inc was liable for damages to the bus and anyone injured in the accident. The cost without auto insurance would be tens of thousands of dollars. But with their insurance policy, Plumbers Inc only has to pay the deductible.
A commercial insurance policy requires a monthly, quarterly, or yearly premium. The premium charged is based on the limits and types of coverage chosen. For example, if employees drive personal vehicles for business purposes, businesses will want employer non-owned liability coverage. Other coverage includes bodily injury and property damage coverage, medical payments coverage, collision and comprehensive coverage, and uninsured and underinsured motorist coverage.
Another example–A truck driver for Truckers Inc is driving back to his warehouse on a snowy night when his wheels slide off the road and his truck hits a guardrail. The truck driver is injured, and the truck is totaled. However, Truckers Inc’s auto policy coverage took care of the medical bills and replacement cost of the truck.
Companies should make the important business decision to purchase commercial auto insurance to protect their assets in case of accidents or other unexpected damages.