Business auto insurance gives you the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel — liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists. In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the business automobile insurance policy as the “principal insured” rather than your name. This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.
Whether you need to buy a commercial auto insurance policy will depend on the kind of driving you do. A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business. While the major coverages are the same, a commercial auto policy differs from a personal auto policy in many technical respects. Ask us to explain all the differences and options. If you have a personal umbrella liability policy, there’s generally an exclusion for business-related liability. Make sure you have sufficient auto liability coverage.
Types of Coverage Provided
The commercial auto policy provides coverage for you and your business in a few different ways listed here:
- Liability – Provides coverage for bodily injury and property damage to others who are damaged by an insured vehicle.
- Physical Damage
- Collision – provides coverage for covered vehicles that are damaged by an impact with another vehicle, object or animal.
- Other than collision – provides coverage for damage to covered vehicles by any cause of loss other than collision and other items specifically excluded.
- Uninsured Motorist – Provides coverage to the insured for bodily injury that they have suffered caused by an uninsured motorist. It does not apply if the motorist is underinsured. The limit should be equal to the limit of the bodily injury carried on the policy.
- Underinsured Motorist – Provides excess coverage to the insured for bodily injury they have suffered caused by an underinsured motorist. It does not apply if the motorist is uninsured. The limit should be equal to the limit of the bodily injury carried on the policy.
- Hired Auto – Provides coverage for the insured on any vehicle that is hired by the insured. Physical damage coverage may also be purchased. A car must be hired for less than six months in order to be considered hired and not leased. This coverage may be purchased with owned auto coverage or as a stand- alone.
- Non-Owned Auto – Provides coverage for the employer when an employee or a volunteer uses their vehicle on the employer’s business and causes damages. Coverage may be extended to the employee, but only through a special endorsement.