Commercial auto insurance is a type of insurance specifically designed to protect businesses that use vehicles for their operations. It covers damages, liabilities, and risks associated with vehicles used for commercial purposes, such as delivery trucks, company cars, or vehicles used for transportation services. This insurance helps businesses financially in case of accidents, theft, or other mishaps involving their commercial vehicles, ensuring that they can continue operating smoothly without facing significant financial burdens.

Operating commercial vehicles for business purposes requires specialized insurance protection. Whether you own trucks, vans, buses or other fleet vehicles, proper commercial auto insurance coverage is essential. Let’s explore the key components included in commercial vehicle insurance policies.

What Does Commercial Auto Insurance Cover

Liability Coverage

Liability insurance pays legal damages and costs if your vehicle is involved in an accident causing injury, illness or property damage to others. These types of liability protection are commonly included:

Bodily Injury Liability

Covers medical expenses and lost wages if another person is hurt while in, on or around your vehicle. Minimum limits are often $500,000 per person and $1,000,000 per accident.

Property Damage Liability

Pays for repairs to damage caused to someone else’s vehicle or other property in an at-fault accident. The minimum limit is usually $100,000 per accident.

Non-Owned/Hired Auto Liability

If employees or contractors use their personal vehicles or rentals for work purposes, this protects the business from liability claims.

Uninsured/Underinsured Motorist Coverage

Reimburses injuries to you and passengers if an at-fault uninsured/underinsured motorist causes an accident.

Medical Payments Coverage

Covers medical bills and lost wages of occupants in your vehicle without determining fault, up to a limit such as $5,000 per person.

Physical Damage Coverage

Collision coverage pays repair costs if your vehicle is damaged in an accident regardless of fault. The deductible is paid by the insured. This coverage is optional but is more important for expensive commercial vehicles.

Other Than Collision (OTC) pays repair costs from incidents like falling objects, floods, fires or parking lot collisions without involvement of another motorist. Again a non-mandatory coverage.

Comprehensive coverage bundles collision and OTC together in one premium cost. Either option typically has a $1,000 deductible and actual cash value (ACV) vehicle valuation in claims settlements.

Cargo Coverage

Especially for delivery fleets, cargo insurance reimburses clients and the insured’s business for lost or damaged cargo due to accidents, theft or external events. Limits depend on value of goods carried and average transport volumes.

Drivers

Ensuring licensed and qualified drivers operate vehicles limits risk exposure. Commercial auto policies commonly evaluate:

• MVRs (motor vehicle reports) reviewed quarterly for violations, suspensions.
• CDL (commercial driver’s license) requirements and endorsements met for certain vehicle classes.
• Defensive driving courses certifications kept up to date.
• Minimum age, experience standards and controlled substance testing programs in place.

Additional Options

Customize protection further with non-owned auto coverage, rental reimbursement, full liability waiver coverage, or similar endorsements. Towing/labor costs, loan/lease gap, and uninsured motorist coverage can augment a policy too.

Properly Insuring Commercial Fleets

Work with an experienced agent or broker who understands commercial auto risks. They will assess:

• Vehicle type, size, usage details and driver profiles to develop appropriate coverage levels.
• Fleet values, estimated annual mileage, loss history and safety efforts to analyze adequate limits.
• Potential discounts for policies bundled across business lines, telematics usage, safety initiatives or other credits.
• Compliance with state laws and regulations, as they vary between jurisdictions.
• Optional excess/umbrella liability if considerable assets require higher liability limits.

A Business Auto Rate Calculator helps estimate monthly premium costs for sample fleets. Factors such as location, fleet size/value, liability choices, driver qualifications all impact quoted pricing.

Maintaining accurate, up-to-date records of vehicles, drivers, values and any modifications lets your agent efficiently underwrite and service your policy needs. Proper insurance protects commercial operations from potentially costly legal liability and vehicular damage expenses. Obtaining specialized coverage through an expert broker results in intelligent risk management for motor fleets of any size.

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