What is Business Auto Insurance and Do I Need it?

Motor vehicle accidents are the leading cause of work-related deaths.

You’d never think about not having your personal car insured.

It’s the law, after all…

But what about your business vehicle?

You need insurance for it just like you need insurance for your personal vehicle.

But how do you know what you need?

Keep reading to learn everything you need to know about business auto insurance.

What is Business Auto Insurance?

If you own a business where you or employees do any amount of driving, you need business auto insurance.

Commercial, or business, auto insurance, is insurance for a vehicle that you or an employee is driving when conducting business.

If you have an accident while conducting business, commercial auto insurance covers the costs.

This insurance kicks in when you’re at fault for the accident.

It will cover the vehicle and medical expenses.

The insurance will cover expenses even in the event of a fatal accident.

Like all insurances, not all business auto insurance policies are the same.

To know what you need, you must compare policies the same way you would compare policies for personal auto insurance.

Do I Need Commercial Auto Insurance?

Just because you own your own business, you do not have to have commercial auto insurance.

However, if you or our employees drive for work, consider it.

If you own, lease, or rent any vehicle such as a car or truck, look into this specialized auto insurance.

Do your employees drive their own vehicles to do business?

Or do your employees operate your vehicles?

Even if you lease or rent a vehicle, consider commercial auto insurance.

Auto accidents happen in the blink of an eye.

Having car insurance for your business protects you from lawsuits and liability should those accidents happen under the umbrella of your business.

What Does Business Auto Insurance Cover?

Business auto insurance will cover anything a regular auto policy would cover.

It kicks in when you’re using a vehicle to conduct business.

So if you’re just driving to work and back home but do not drive for your actual job, then you do not need commercial auto insurance.

However, if you have a business that requires driving, such as visiting clients or hauling freight, then you need commercial auto insurance.

Protect Your Business and Employees

In the same way, the insurance protects you when you drive, it will protect your business when either you or your employees drive.

If your employees happen to hit a pedestrian when driving a business vehicle, your insurance will cover the pedestrian’s medical bills.

If you plow over a residential mailbox after you lose control on an icy road, commercial auto insurance will cover the damage of your vehicle and the cost of replacing the mailbox.

The insurance will cover more than just two-vehicle collisions.

But it does still cover those.

You can purchase auto insurance for any vehicle your company uses.

Car insurance for your business will cover anything from a sedan for business trips to a cargo truck that hauls your freight.

Types of Protection

Your business should already have liability insurance.

General Liability Insurance or Professional Liability Insurance will protect your business from any lawsuit-happy individuals.

Commercial auto insurance offers specific protection in addition to general liability.

It covers four major things.

1. Auto Liability

If your business vehicle causes any property damage or bodily injury, business auto insurance kicks in.

It also pays for accident-related legal expenses.

So if either you or an employee hit a pedestrian, as mentioned above, and the pedestrian attempts to sue your company, the business auto insurance kicks in to cover legal expenses.

2. Medical Payment

If you’re on a business trip and have an accident, your business auto insurance covers the cost of your medical bills.

It will also cover the cost of medical bills for anyone else in the car.

Good business auto insurance covers medical bill costs regardless of who is at fault for the accident.

3. Physical Damage and Collision

Commercial auto insurance covers more than just damage because of a collision.

If someone attempts to damage your car, this insurance covers the cost of repairs.

So if you’re on a business trip and staying at a hotel, and someone vandalizes your car or damages it, commercial auto insurance will normally pay for those damages.

If you are traveling and end up in the middle of a hailstorm that causes thousands of dollars worth of damage, commercial auto insurance kicks in.

4. Uninsured Motorists

Unfortunately, many people drive without insurance.

A 2017 study conducted by the Insurance Research Council revealed that approximately one in every eight drivers in the United States was driving without insurance.

If individuals cannot afford to pay for car insurance, they cannot afford to pay for your damages.

Your commercial auto insurance policy will cover your damages and medical costs even if they result from a collision with an uninsured motorist.

Big Trucks Require Insurance

If your business does any work that requires larger vehicles, you actually must have commercial auto insurance.

This includes the following vehicles:

  • Box trucks
  • Food trucks
  • Work vans
  • Service utility trucks

Any other truck usually does not just need insurance, but it often requires business auto insurance.

As you explore the world of automobile insurance for your business, you may hear different terms.

Ultimately, the words commercial vehicle, business auto, commercial auto, truck and fleet insurance all refer to the same insurance.

Drive Safe, Drive Insured

Now that you understand all the ins and outs of business auto insurance, you can start looking for the best policy for your company.

For all of your insurance needs, contact us.