Commercial Auto
Insurance

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What is Commercial
Auto Insurance?

Commercial Auto Insurance is a type of Commercial Insurance specifically designed to cover damages to vehicles used to conduct business operations. Business Car Insurance could provide coverage for injuries that the insured business auto incurred while doing a business. Also, this type of Business Insurance could provide protection in case the insured company is the one who is legally liable for the accident that has happened and causes bodily injury and property damages to others.

In the year 2017, almost 700,000 fatal car accidents were reported by the Federal Motor Carrier Safety Administration. Moreover, nearly 27% of these crashes involve large trucks used to transport goods, equipment, and other commodities. Furthermore, 11% of these fatal crashes were associated with buses that are transporting passengers.

All things considered, in many states such as California, it is mandated for all businesses that own vehicles to procure Commercial Auto Insurance. This policy’s purpose is to protect the insured business owner against uncertain damages that they might incur at any time with specific coverage limits.

Commercial Auto Coverages

Commercial Auto Coverage is also similar to what Personal Auto Insurance Coverage provides, which protects the policyholder from significant financial risk. Commercial Auto Insurance offers Liability Coverage (Bodily Injury Liability and Property Damage Liability), Collision, Comprehensive, Uninsured and Underinsured Motorists Coverage, and Medical payments (PIP). At the same time, there are some differences in Commercial Auto and Personal Auto Policy, such as exclusions, eligibility, and limits.

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Types of Business Auto Insurance Coverage

Auto Liability Coverage

The insurance company will pay all the sums an insured must pay for a third party person. However, a payment could only be made if the insured is legally responsible for the damages because of “Bodily Injury” or “Property Damage” to which the auto policy applies. Commercial Auto Insurance covers the medical bills for the third party person that is involved in an accident.

Also, insurance companies have the duty and the right to defend the insured against a suit associated with damages. However, this coverage has a specific limit and wouldn’t be able to cover any “bodily injury” and “property damages” to which this auto policy does not apply. However, companies can only settle claims for which this coverage is considered appropriate. Lastly, every insurance company’s duties exhaust if the payment for judgment and settlements already reach the insurance limits.

Exclusions for Liability Coverage

Expected or Intended Injury

Liability Insurance could deny Bodily Injury Liability and Property Damage Liability if the claims were intended and staged by the insured. To give an example, suppose that the insured plan to collide his auto with his colleague’s fence for the purpose of the amount they could claim. With this situation, the insurance company would refuse the coverage.

Liability coverage does not have an obligation to cover or be held liable for any Workers Compensation. Furthermore, denial of coverage would apply to any compensation claims due to unemployment, disability benefits, or similar law.

Any employee of the insured business that is filing a claim for the main reason for sexual harassment is excluded from this coverage. Moreover, claims regarding discrimination at work, invasion of privacy, and breach of contract are also an exclusion to this coverage.

However, you must consider purchasing an Employers Practices Liability Insurance (EPLI Insurance) for better protection from these caps of losses.

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Physical Damage Coverage

Comprehensive Coverage

Comprehensive coverage would pay for the repair or replacement of the insured commercial vehicles that procures damages “other than collision” or overturn. Also, commercial auto insurance covers other damages the are due by losses as listed below;

  • This coverage would cover losses due to fire, explosion, and lightning.
  • Also, coverage would apply if the vehicle procures damages from earthquake, hail, windstorm, and flood.
  • Moreover, vandalism, mischief, theft, burning, and sinking of the vehicle are applicable for comprehensive coverage.
  • Lastly, derailment of any conveyance while transporting the insured auto to another place would be covered.
Collision Coverage

Collision coverage could cap losses that are due to the overturning of the vehicle. It could also provide repairs and replacement payments if the damages are due to a collision with another object and vehicle. However, always keep in mind that this coverage has specific limits and exclusions.

Uninsured Motorist Coverage

The Uninsured Motorist Coverage (UM) could pay for the losses an insured incurs from an uninsured motorist. Insurance companies could provide payment if the insured is legally entitled to the compensation. However, coverage would only apply if the accident results in “bodily injury” and “property damages.” Also, coverage could only apply if the damages are due to the ownership or use of the “uninsured motor vehicle.”

Underinsured Motorist Coverage

Underinsured Motorist Coverage (UIM) protects when the driver that caused you damages is carrying insufficient insurance to cover the expenses fully. Your
Workers Compensation policy also can cover your employee while he is driving.

Who is Insured under Commercial Auto Insurance?

As the policyholder that is listed in the declaration, you are insured under a Commercial Auto Policy. The other insured is known as Permissive Users. Anyone driving the covered vehicle by your policy is also insured if you allow them to drive the vehicle you own, rent, or borrow.

Additionally, there is also an Omnibus Clause. This extends the coverage to persons that are not listed in the policy. These individuals are the one who is authorized to drive the insured vehicle.

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There are ways to purchase your Business Auto Insurance either go directly to the private insurance providers, insurance agent, or an independent broker. Here at InsureHopper, we could provide you affordable quotes through our affiliated licensed and captive insurance agents.

With Insurehopper, we could help small business owners to compare Commercial Insurance Quotes from different U.S carriers in one easy and hassle-free application. Get a Free Commercial Auto Insurance Quote today to protect your business from accidents that may involve your company vehicle.