What is Commercial Auto Insurance and What Does it Cover?

Commercial auto insurance is a business insurance coverage that protects your company against liability for damages caused by accidents involving your business automobiles and offers compensation to occupants injured in an accident. If your business has vehicles, commercial auto insurance coverage can provide you and your staff with essential financial protection while operating company-owned, rented, or privately-owned vehicles for business purposes. It is essential to understand that personal auto insurance coverage typically does not cover vehicles used for business purposes.

What Is Covered By Commercial Auto Insurance?

Typically, commercial auto insurance covers liability damages, collision or comprehensive physical damage loss to your business vehicles, medical expenses for injuries to occupants of your business vehicles, and damages sustained by occupants of your business vehicles due to the negligence of an uninsured or underinsured motorist.

The commercial car policy provides physical damage coverage for vehicles you own, lease, hire, or use for business purposes and liability for bodily injury and property damage caused by your usage of insured business vehicles.

It can contain two types of physical damage coverage for your covered vehicles: collision and comprehensive.

• Collision loss: automobile accident-related damages
• Comprehensive loss includes weather, theft, and other non-collision-related sources of damage.

Also included are two types of liability protection:

• Coverage for accident-related injuries to third parties when you are at fault.
• Property damage coverage: from accident-related damage to another person's property, such as a car or home, while you are at fault.

There are numerous coverage options available. Among the most prevalent coverages are:

Collision coverage reimburses you for vehicle damage caused by an accident.

Comprehensive coverage protects against damage to your business vehicle resulting from non-collision events, such as theft, weather, vandalism, or fire.

After an accident causes damage to your covered business car, rental reimbursement pays for a rental vehicle, subject to certain limits.

Liability coverage compensates for injuries and property damage to others if you are at fault and your legal fees if you are sued.

Uninsured or Underinsured Motorist coverage covers bodily injury and property damage sustained by occupants of your insured business vehicle in the event of an accident caused by an uninsured or underinsured driver.

Personal Injury Protection compensates medical bills and lost wages for injuries sustained by occupants of your covered commercial vehicles, regardless of fault.

Medical Payments coverage compensates for medical or funeral expenses incurred by injured occupants of your insured commercial vehicles, regardless of who was at fault.

These coverages are available for owned vehicles and may be provided for hired or leased vehicles and non-owned vehicles (those used for business purposes but not owned, rented, or hired). Some of these coverages are state-specific. Check with an insurance agent to verify you have appropriate coverage for the states where your insured vehicles will be driven if they are stored out of state.