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      Commercial Auto Insurance 101

      This page is meant to serve as a 101 educational resource for Commercial Auto insurance.

      Commercial auto insurance is a type of insurance policy specifically designed to cover vehicles used for business purposes. This includes cars, trucks, vans, and other types of vehicles operated by employees or for business activities. The coverage is essential for businesses that rely on vehicles to deliver goods, transport equipment, carry employees, or perform services.

      Eg: A flower shop provides delivery service. One of the delivery vans gets into an accident which was the delivery driver’s fault. The business will now have to pay for the damage caused to others and their own delivery van. This will come from Commercial Auto insurance.

      Here are key aspects of commercial auto insurance:

      1. Liability Coverage: This is a core component of commercial auto insurance, covering damages and injuries your business is legally responsible for if an employee is at fault in a vehicle accident. It includes both bodily injury liability and property damage liability.
      2. Physical Damage Coverage: This part of the policy covers damage to your business vehicles from accidents (collision coverage) or other perils like theft, vandalism, and weather events (comprehensive coverage).
      3. Uninsured/Underinsured Motorist Coverage: Protects your business if an employee is in an accident with a driver who has no insurance or insufficient coverage.
      4. Medical Payments/Personal Injury Protection: Depending on the state, this coverage may pay for medical expenses for the driver and passengers in your business vehicle in the event of an accident, regardless of who is at fault.
      5. Hired and Non-Owned Auto Liability Insurance: This is particularly important for businesses that rent vehicles or have employees using their personal vehicles for business purposes. It covers liability issues that arise in these situations.
      6. Cargo Coverage: For businesses that transport goods, this provides protection for the cargo in case of damage or loss during transit.

      Commercial auto insurance is distinct from personal auto insurance in terms of the coverage limits, types of vehicles covered, and the usage of the vehicles. The coverage limits are usually higher in commercial auto policies, reflecting the greater risks associated with business use.