Commercial Auto Insurance

• A personal auto policy is unlikely to cover a vehicle used mainly for business, and it will not cover one the business owns.
• Most states require liability insurance on business vehicles.
• When an employee runs an errand for you in their own car and hurts someone, the injured person may sue your business.

Who Needs It

• Any business that owns a car, van, pickup or truck.
• A business whose people drive their own cars for work.
• A business that hauls for hire, which also faces federal insurance rules. See Trucking Insurance.

A business auto policy covers the vehicles your business owns, and the coverage can differ from one vehicle to the next.

Liability.

Pays for injury or damage your vehicle causes to other people when the business is legally liable, up to the policy limits. For example, your van rear ends a car at a light.

Collision.

Pays for damage to your vehicle when it hits an object or overturns. For example, a pickup backs into a post at a loading dock.

Comprehensive.

Pays for damage from most other causes, such as fire, theft, flood and falling objects. For example, a tree limb falls on a parked truck in a storm.

Uninsured motorists and medical payments.

Many states require one or both. Uninsured motorists coverage protects you when the other driver has no insurance. For example, an uninsured driver runs a red light and hits your service van.

Hired and non owned autos.

Protects the business when employees drive their own cars for work. The non owned part sits over the employee’s own auto limits. For example, an employee drives to the bank in their own car and causes an accident.

Your policy’s own wording decides what applies to a particular loss.

These fall outside a business auto policy, or need to be added:

Wear and tear and breakdowns.

Comprehensive excludes wear and tear, mechanical breakdown and war.

Cars the business does not own.

Employees’ own cars used for work may need hired and non owned auto coverage.

Repairs to your own vehicle on liability alone.

Liability pays other people. Repairs to your vehicle need collision or comprehensive.

Vehicles under your business owner’s policy.

A business owner’s policy gives no coverage for vehicles, so they need their own policy.

There is no single price. The premium follows your vehicles, your drivers and how the vehicles are used, and these are the factors an insurer weighs:

Your vehicles.

Size, age, theft rating and safety rating. Commercial vehicles are also classed by weight.

Your drivers.

Their driving records. Triple-I advises hiring drivers with good driving records and checking each driver’s motor vehicle record every year.

How the vehicles are used.

Your agent will ask how each vehicle is used, who drives it, and whether you own, rent or lease it.

Your deductible.

The higher the deductible, the lower the premium.

To start a quote, list every vehicle that does work for you and who drives it.

Combined single limit.

A business auto policy commonly uses one combined single limit for injury and damage to others.

When a claim is larger.

If a judgment or settlement is more than your limits, you pay the difference.

Above your limits.

An umbrella policy can sit over your auto liability when the umbrella lists the auto policy as an underlying policy.

For hire carriers.

If you haul non hazardous property for hire in interstate commerce, in vehicles of 10,001 pounds or more, you need at least $750,000 of public liability coverage. Proof must be filed with and accepted by FMCSA before authority is issued or stays in force.