What to know about commercial auto insurance
If you use vehicles for your business, they must be insured. You cannot insure more than a few vehicles with your personal auto insurance, and even if you mostly use your own vehicle for business purposes, your personal insurance may not cover all your driving. That’s why it makes sense to have commercial auto insurance.
What is it?
A commercial auto policy is similar to an individual auto insurance policy and offers many of the same coverages. One of the main differences with commercial coverage is that it can cover several vehicles and several different drivers, and it can carry much higher limits.
Who is it for?
Anyone who uses vehicles for their business should have a commercial auto policy. This includes large companies with many owned vehicles that employees drive, as well as business people who drive their cars for business purposes. If the car is registered to the business, even if it is a sole proprietor company, it should be covered under commercial insurance.
How does it work?
Commercial auto policies cover multiple vehicles and multiple drivers. They typically cover any employee who might drive a company-owned vehicle, so at large companies, they might cover hundreds of people. If an employee is involved in an accident, a claim must be filed just like with personal auto insurance.
Types of policies
Just as with personal auto insurance, there are a number of different types of commercial coverage. Liability covers damage and injury that may be inflicted by an employee driver responsible for an accident. Collision coverage protects the business vehicles against damage sustained in a crash while comprehensive protects vehicles from non-crash damage, such as weather damage, theft and vandalism. These two coverages often are included as a package in what’s called physical damage coverage. There are other coverages available as well that may vary by the insurer.
The main benefit of having a commercial auto policy is ensuring your business’s vehicles and all employees who may drive them are covered. It is not a good idea to try to rely on personal auto coverage for business driving.