What is Commercial Auto Insurance?
Commercial auto insurance, also known as commercial vehicle insurance, is a type of insurance that is specifically designed for businesses that operate vehicles, such as delivery trucks, vans, and other types of heavy vehicles. This type of insurance provides coverage for damages or losses incurred as a result of accidents or other mishaps involving the commercial vehicle.
Commercial auto insurance typically includes liability coverage, which helps protect the business from financial loss if they are found liable for an accident. This coverage includes bodily injury and property damage liability.
Why is commercial auto insurance important?
If your company owns a car, you will very likely need commercial auto insurance. Nearly every state requires commercial auto insurance coverage for business-owned vehicles, and in states that do not require it, drivers are still responsible any damages they cause.
You can rely on commercial auto insurance for financial protection if you or an employee needs medical care or faces legal expenses due to an automobile accident. If you don’t carry commercial auto insurance, your business will be responsible for any medical bills and legal fees, which can get expensive.
Commercial auto insurance typically provides coverage for: liability damages; collision or comprehensive physical damage loss to your business autos; medical expenses for injury to occupants of your business autos; and damages sustained by occupants of your business autos due to the negligence of an uninsured or underinsured motorist.
The commercial auto policy provides physical damage coverage for vehicles you own, lease, hire or use in your business and liability coverage for bodily injury and property damage caused to others by your use of the insured business vehicles.
It can include two types of physical damage coverage for your insured vehicles:
- Collision loss: damage from auto accidents.
- Comprehensive loss: damage from weather, theft and other non-collision causes.
It also includes two types of liability coverage:
- Bodily injury coverage: for accident-related injuries to others when you’re at fault.
- Property damage coverage: from accident-related damage to someone else’s property, such as a car or house, when you’re at fault).
Simply put, vehicles used for work-related reasons are commercial. A private vehicle, on the other hand, is one you use for personal use, including commuting.