Commercial Auto Insurance

Commercial auto insurance covers legal bills, medical expenses, and property damage if a business vehicle is involved in an accident.

Why is commercial auto insurance important?

If your company owns a car, you will very likely need commercial auto insurance. Nearly every state requires commercial auto insurance coverage for business-owned vehicles.

You can rely on commercial auto insurance for financial protection if you or an employee needs medical care or faces legal expenses due to an automobile accident. If you don’t carry commercial auto insurance, your business will be responsible for any medical bills and legal fees, which can get expensive.

Even when business auto insurance coverage isn’t required, it’s still a smart choice. Without it, you could end up paying thousands of dollars in medical bills and other costs.

What does commercial auto insurance cover?

Commercial auto insurance helps cover medical payments and property damage related to an accident. This coverage includes legal expenses if you’re sued. A policy may also cover vehicle theft, vandalism, and other losses and damages.

Specifically, Commercial Auto Insurance coverage includes:

Auto accident liability - Commercial auto insurance includes liability coverage that helps pay for damages in an accident you caused. That could include, Repair costs for the other person's damaged vehicle or property and Legal expenses if you're sued over the other driver's injuries.
Medical Payments - Commercial auto insurance policies that include medical payments coverage can pay for your medical expenses if you're injured in a car accident and medical expenses for passengers in your vehicle, this coverage is available regardless of who caused the accident.
Physical Damage and Collision – commercial automobile insurance protects against vehicle theft and physical damage, as well as provides comprehensive coverage for non-collision damages, such as: Vandalism, fire, certain weather events and impact with another object.
Accident involving uninsured Motorist - About one in eight drivers in the United States are uninsured, according to the Insurance Research Council. When they cause accidents, they might not be able to pay for damages. Your policy's uninsured
motorist coverage makes sure your business doesn’t have to pay for the resulting medical expenses or vehicle repairs.

Who needs commercial auto insurance?

Commercial auto insurance benefits a variety of industries that utilize business vehicles. It is designed for both businesses and independent contractors that need a company vehicle in order to operate their business.

However, there are a few specific professions who need commercial auto coverage more often than others, including:

Construction and installation

A HVAC installation employee rear-ends a sports car while driving your construction or installation business’s truck. The accident is the employee’s fault. Your business’s commercial auto insurance policy can cover the cost of repairing the sports car. It can also cover the other driver’s medical expenses for injuries sustained in the crash.

Consulting

A consultant at your IT consulting company is driving to a client’s home when another driver runs a stop sign and hits your company car. The other driver accidentally let his insurance policy lapse and is not insured. Your company car policy can pay for the damage to your car caused by the uninsured driver.

Cleaning

A janitor gets into an accident while driving a cleaning company's van to a client's office. No one is seriously injured, but the janitor is brought by ambulance to a local hospital and given X-rays. The cleaning company's commercial auto insurance policy pays for the ambulance ride and medical treatment.

Landscaping

A tree uprooted by a windstorm falls on a lawn care company’s truck and breaks the windshield. The lawn care business’s commercial auto insurance policy pays for a replacement windshield.

What does commercial auto insurance not cover?

Personal or leased vehicles

Commercial auto insurance does not cover personal or leased vehicles. However, your business can still be held accountable if an employee gets into an accident in a personal or leased vehicle.

Hired and non-owned auto insurance is the appropriate policy for vehicles that your business uses but does not own. This policy will provide protection for employees who drive their own or leased cars for work purposes.

Recently purchased vehicles

If you purchase a business vehicle and it's not yet covered by your commercial auto insurance policy, you would be responsible for any liabilities that may occur to the vehicle.

In order to protect any recently purchased business vehicles, you should get any auto liability insurance which offers a temporary extension of your commercial auto coverage. It can also cover any hired and non-owned vehicles that you use for your business.

Customers' vehicles

If your business is storing or performing service on a customer's vehicle, it would be not covered under your commercial auto insurance. If something were to happen to your customer's vehicle, such as damage from a break in, you would be responsible for repair and other related expenses.

Garage business risks

If you have a garage-based or auto service business, your commercial auto insurance policy does not protect against common garage operation risks, such as a customer slipping and falling on leaked motor oil.

Garage liability insurance is a type of general liability insurance that covers the many risks associated with automotive business operations. This includes customer injuries and legal costs from lawsuits.

Does commercial auto insurance cover personal use?

Commercial auto insurance typically covers employees who are given permission to drive your business vehicle. This policy will help pay the costs of accidents when an employee is driving, even if the vehicle was used for personal reasons.

So, what about personal vehicles occasionally used for work? You may ask. That's where a policy called hired and non-owned auto insurance (HNOA) comes into play.

What is the difference between commercial and personal auto insurance?

Commercial auto insurance policies are designed for company cars that cover a lot of ground.

Policies typically have higher coverage limits to account for the increased risk.

Personal auto insurance policies only cover claims related to personal use, including your commute and travel unrelated to work.

They have lower limits and usually cost less.

If you’re involved in an accident while driving your personal car for work, your insurance company might refuse your claim. That’s why independent contractors or sole proprietors who own a car used for work should consider commercial auto insurance or HNOA.

Commercial Trucking Insurance

Commercial truck insurance is a group of specific auto insurance policies designed to meet the needs of trucking businesses. Basic commercial truck insurance policies cover your trucks in the event of an accident. Collision and comprehensive coverage cover most damages from a wide range of perils.

Who needs commercial trucking insurance?

Independent owner-operators and truck drivers
Commercial transportation businesses
Any business with trucks, drivers, or transportation-related activity

From a single truck to a wide fleet spread across the country, basic commercial truck insurance is required by law and offers a variety of options to personalize your protection.

Unlike commercial auto insurance, commercial truck insurance is designed specifically for trucks and cargo. The Federal Motor Carrier Safety Administration (FMCSA) requires any commercial operation of a truck to hold a commercial truck insurance policy.

What coverage can commercial auto provide for trucking businesses?

You can tailor your commercial auto insurance policy to match the needs of your commercial trucking business. Your policy may cover:

Legal expenses

If your small trucking business is sued over an accident, legal defense fees can add up quickly. You could also end up having to pay a settlement or court-ordered judgment.

Medical expenses

If an accident injures your truck driver or any passengers, your policy can cover the cost of medical care.

Collision

Collision coverage pays for damage to your freight truck or other company vehicle, regardless of who is at fault.

Uninsured motorists

This coverage pays for damage caused by drivers who don’t have insurance.

Non-collision damages

Comprehensive insurance covers non-collision damages, including vandalism, theft, and fire.

General liability insurance

General liability insurance covers common business risks like customer injury, customer property damage, and advertising injury. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.

General liability covers common trucking risks

In addition to the risks of operating a truck, small trucking companies face the same liabilities as any other small business. That includes accidental customer injuries and damage to customer property. General liability insurance covers the most common types of third-party injuries and accidents.

This policy provides liability coverage related to:

Customer injuries
Customer property damage
Copyright infringement and other advertising injuries

What coverage can general liability provide for trucking companies?

Customer injuries;

If a customer or delivery person slips and falls at your warehouse, there’s a chance you could be blamed for the injury. If the person sues, you may have to pick up the tab for medical bills – plus the cost of hiring an attorney. General liability insurance covers:

Medical expenses
Attorney’s fees
Court-ordered judgments
Funeral expenses in fatal incidents

Customer property damage

In the trucking industry, even a simple mistake can be costly. General liability insurance protects your business when customer property is damaged. For example, if a trucker drops heavy boxes onto weak shelving at a client’s business and breaks it, your general liability policy could help pay for the cost of replacing it.

Copyright infringement and other advertising injuries

While advertising your company and its trucking services, your small business could be vulnerable to advertising injury lawsuits. Accidental advertising injuries, such as inadvertently copying a competitor’s logo, are covered by general liability insurance. This includes:

Defamation, both libel (written) and slander (spoken)
Copyright infringement

Other important policies for trucking firms

While general liability insurance covers basic trucking risks, it doesn’t cover damages related to your vehicle. Commercial auto insurance pays for truck accidents, vehicle theft, vandalism, and weather damage. Plus, it’s a legal requirement for any business-owned vehicle.

Trucking firms typically also purchase marine cargo insurance, which covers property while in transit that the firm is legally responsible for insuring, and trailer interchange coverage, which pays for physical damage to a trailer that the truck driver doesn't own.