What Does Commercial Auto Insurance Cover?
Although coverage availability and requirements vary by state, these are some of the common types of commercial auto coverages available to business owners:
- Bodily Injury Liability Coverage helps pay for the other driver’s medical expenses if you or one of your employees causes an accident.
- Property Damage Liability Coverage pays for damage that you or your employees cause to someone else’s property.
Drive Other Car Coverage
covers your business’ executive officers and their spouses if they drive vehicles that aren’t on your commercial auto insurance policy.
- Collision Coverage helps pay to fix or replace your business’ car if you hit something, like another car or pole.
- Comprehensive Coverage can help pay for car damages caused by theft, fire or natural disasters.
- Medical Payments Coverage can help pay for medical expenses for your employees and their passengers in the event of an accident, such as medical treatments and rehabilitations, dental care or funerals.
- Uninsured/Underinsured Motorist Coverage helps pay for you or your employees’ medical expenses or to fix your car if the other driver lacks enough liability coverage or is uninsured.
- Rental Car Coverage offers liability coverage while you or your employees are driving a rental vehicle for business. Many rental companies have loss damage waivers or collision damage waivers that you can sign to avoid paying for property damage to a rental car.
- Personal Injury Protection (PIP), also known as no-fault insurance, can help cover medical expenses, lost wages or funeral costs after an accident, no matter who is at fault.
- Hired and non-owned auto insurance offers lawsuit liability coverage if you or your employees are involved in an accident with a personal, rented or leased car that was used for business errands. However, this type of commercial vehicle insurance coverage will not pay for damages to the personal, rented or leased car.
What Is Not Covered?
The following situations won’t be covered under a commercial auto insurance policy:
- Medical expenses unrelated to an accident that happened while an employee is driving a company vehicle.
- Contents inside your business vehicle that were damaged in an accident.
- Accidents that occur when an employee is driving a personal vehicle for personal reasons. You can get coverage for this with hired and non-owned auto insurance coverage.
- Repairs to a rental vehicle you or your employees were driving while waiting for your company vehicle to be fixed after an accident. If your business needs this type of coverage, you can add hired and non-owned auto insurance to your policy.
What Types of Vehicles Are Covered?
Most states require you to have commercial auto insurance if your business uses any company vehicles. You should check with your state laws to find out what coverage is required for your business. Consider commercial auto insurance if your business:
- Owns, leases or rents vehicles, such as cars and commercial trucks**
- Has employees who drive their own vehicles for business
- Has employees who operate leased, rented or owned company vehicles
- Has employees who are livery drivers
The 6 most common industries who need commercial auto insurance to protect their company vehicles are: