The Essential Guide to Buying Commercial Auto Insurance

Roughly 75 percent of businesses around the world are underinsured. It’s a shocking statistic given the many business risks that companies face today.

For businesses that operate vehicles, commercial insurance is especially important. The road can be a dangerous place, and auto businesses have unique risks that most other businesses don’t.

That’s why having commercial auto insurance is so vital.

While on the road, your vehicles and drivers are always at the mercy of foul weather, poor road conditions, careless road users, and heavy traffic. Add these risks to vandalism, uninsured drivers, and America’s litigious culture, and the potential costs escalate.

With the best commercial auto insurance, however, you can reduce the financial impact of any interruptions, damages, or losses that occur because of the unexpected.

But what exactly is commercial auto insurance? What does it cover? How can you identify and purchase the ideal insurance policy for your auto company?

These are some issues we cover in this comprehensive guide. Read on to learn more.

What Is Commercial Auto Insurance?

Commercial auto insurance refers to insurance that covers businesses that operate vehicles. This insurance helps businesses cover expenses associated with repairing or replacing company vehicles.

All companies that use vehicles for business purposes need commercial auto insurance coverage. A commercial auto insurance policy provides a higher level of coverage than a personal car insurance policy.

This insurance coverage also boosts your risk mitigation strategy. How? Well, it gives you better chances of keeping your operations running, even when one or more of your vehicles have been involved in an accident.

Commercial auto insurance is available for all types of vehicles. These include cars, vans, semi-trucks, trucks, and specialist vehicles.

What Business Auto Insurance Covers

Commercial auto insurance carriers provide coverage for expenses associated with an accident. These costs include:

  • Physical damage or theft
  • Medical payments and expenses
  • Car accident liability
  • An accident with an uninsured driver

Study the fine print to find out any policy exclusions, coverage eligibility, and so on when applying for this type of insurance.

Purchasing Commercial Auto Insurance

The best commercial auto insurance is the one that fits your company’s needs perfectly. Here are a few smart tips for purchasing coverage that you won’t regret.

Understand Your Needs

How often do you use vehicles for business tasks? If you only use one vehicle occasionally for business purposes, then you may want to consider expanding your personal car coverage.

Do you only use rental vehicles in your business? Then you’ll want to go for hired auto insurance. If some of your employees regularly use their personal vehicle, then you want to get non-owned auto coverage.

Know Your Unique Business Risks

Every type of business has its unique risks. Carefully examine your company and take stock of your operations, how heavy your vehicle use is, and the different risk scenarios in your business.

Depending on whether you transport clients, deliver food, haul construction equipment, or are in the moving business, your business will have specific hazards. By identifying these unique risks, you can decide which types of auto coverage you should look at.

Purchase the Highest Amount of Coverage You Can

There are minimum auto coverage requirements in every state. However, your business may require more, depending on the nature and scope of your operations.

Always go for as much coverage as your business can afford. This way, you are more insulated in case one of your employees gets involved in an accident.

Understand the Difference Between Commercial and Personal Auto Insurance

A personal auto insurance policy generally doesn’t cover accidents that occur when driving your personal car for business purposes.

It’s why you need business auto insurance to cover any damages to your vehicle or other vehicles involved in an accident during business operations.

As we pointed out earlier, commercial auto insurance can also cover other costs related to the accident, including medical expenses and legal fees, should the other driver sue your business.

Find Out What’s Covered in the Policy

Not all commercial auto insurance policies are the same. Most policies cover auto liability, uninsured and underinsured motorists, medical expenses, physical damage, collision, rental assistance, and vehicle rental reimbursement.

Contents of the vehicle are usually not covered by these policies.

Look for Ways to Proactively Cut Costs

You want to keep your insurance premiums low. One way to do so is by taking appropriate actions to minimize the likelihood of accidents and other unpleasant occurrences.

Invest in safety devices for your vehicles. For instance, consider installing anti-lock brakes, automatic seat belts, side airbags, and daytime running lights. You could also go for anti-theft devices such as GPS and alarm systems.

Don’t forget to do your research when hiring your drivers. Check employee driving records before entrusting them with company vehicles. Hiring employees who have stellar driving records helps keep your insurance premiums low.

Choose the Right Auto Insurance Provider

Once you start shopping for commercial auto insurance, the first thing you’ll realize is that there are countless agencies offering this service.

Given that not all business auto insurance carriers are created equal, you need to be careful when choosing the right one for you. Keep in mind that the kind of insurance provider you choose will determine what experience you have with them.

Start by getting recommendations from people you can trust. Next, look at whether the company is properly certified to operate in your state.

Other factors like the company’s history and reputation, ease of doing business, rates, and special offers should also come into play.

Get the Right Commercial Auto Coverage for You

A huge part of being a responsible business owner is planning ahead for potential risks. This includes getting a suitable commercial auto insurance policy if vehicles play a role in your business operations.

Are you interested in a business insurance policy that’s tailored for your needs? Please contact us today.