If you’re a business owner that uses vehicles for work, you absolutely need to protect yourself with commercial auto insurance. This is a critical component to help safeguard employees who are operating vehicles, while generally ensuring the safety of your business. Whether you use a few vehicles to conduct business, or you own a fleet of trucks, service vans, or company cars, protecting your business with commercial auto insurance is essential. Here’s what you need to know when shopping for a commercial auto policy.
Why You Need Commercial Auto Insurance
You shouldn't forego vehicle insurance and you absolutely shouldn’t skip out on the commercial auto insurance if you are using vehicles for your business. Commercial auto insurance provides protection for all employees while operating a vehicle, while also extending coverage to anyone injured in the event of an accident. This helps to protect your business from financial and litigation risk due to any injuries. Commercial auto insurance covers you in the following instances.
- • Ensures all collision costs are addressed.
- • Pays for medical expenses if an employee is injured in a vehicle accident on the job in a company vehicle..
- • Is applicable if employees are involved in an accident with their personal vehicles while on the job.
- • Ensures legal and industry compliance.
Types of Vehicles Covered with Commercial Auto Insurance
Commercial auto insurance covers almost any type of vehicle you might use for business purposes. If your vehicle carries equipment or products, is utilized for deliveries or services, or transports employees for work purposes, it needs to be added to your policy. Permanent fixtures, such as internal shelving, are also covered under this policy. Other tools and equipment will need additional coverage. Commonly insured vehicles include:
• Delivery vans
• Pickup trucks used for business
• Box trucks
• Tow trucks
• Semi-trucks and trailers
- • Company-owned sedans and SUVs
Your commercial auto insurance policy may vary based on various factors related to your vehicle such as risk status, purpose, usage, weight, and the type of work performed.
Type of Work and Usage Covered Under Commercial Auto Insurance
Insurance providers need to evaluate the nature of your business and the types of work you conduct before determining what will be covered by your commercial auto insurance. For example, construction equipment is not covered, nor are tools that are moved from vehicle to vehicle during the course of work. Here are some factors providers will assess when evaluating coverage.
• Do you transport goods or equipment?
• Do you provide rideshare or delivery services?
• Do you carry passengers for business purposes?
• Do you operate construction or contracting services?
• Do you make frequent deliveries?
It’s worth noting that businesses that conduct high-risk activities, such as hauling hazardous materials or cross-country freight, may require specialized coverage. It’s important that you are as transparent as possible to ensure you gain the coverage you need.
What is Needed from Drivers for Commercial Auto Insurance?
It’s necessary to supply driver details so that insurance providers can evaluate a few key factors. These include:
• Driver’s date of birth
• Driving history and experience
• Past violations or accidents
• Number of drivers operating the vehicles
These details help providers determine your risk status, which impacts your rates. It’s a good idea to use employees with clean driving records to help lower insurance costs while reducing risk exposure.
In-State vs. Out-of-State Operations and Commercial Auto Insurance
Where you operate your business can affect what kind of commercial auto insurance coverage you need. Requirements differ by state and it’s important to comply with local regulations and ensure you have coverage that spans across states.
• In-state businesses: Typically require standard commercial auto coverage that complies with state laws.
• Out-of-state businesses: May need additional coverage, such as federal filings for long-haul trucking or interstate deliveries.
If your business crosses state lines, chat with your insurance provider to ensure you’re covered.
Owner’s Personal Address and Business Details
While it may sometimes seem counterintuitive, business owner details also matter. Insurance providers factor in the personal address of the business owner because it affects underwriting decisions. This helps determine:
• Where vehicles will be stored
• Risk levels based on crime rates and traffic density
• State-specific regulations
It’s also important to provide business location and details so that providers can evaluate risks associated with that physical address.
Commercial auto insurance is an absolute must for anyone using vehicles as part of their business and it’s important that you have good coverage at a price you can afford. Experienced insurance providers will tailor coverage to your specific business needs and goals if you provide them with the necessary details.