Many business owners mistakenly think that their personal auto insurance will cover them if they get into an accident while driving for work. In fact, anytime that driving is necessary for your business, you likely must have a commercial auto insurance plan in place. Below, we'll answer the most frequently asked questions concerning commercial auto insurance for your business.
What Is Commercial Auto Insurance?
Commercial auto insurance is meant to provide auto insurance coverage for commercial vehicles — such as cars, trucks, and vans owned by businesses.
It also provides auto coverage for personal vehicles that are being used for business reasons. Remember that even if you have a personal auto insurance policy for your own vehicle, if you are driving it for your company (to pick up a shipment or make a delivery, for example), it needs to have commercial auto coverage. The same goes for the personal vehicles of your employees and co-workers, as well.
Does Every Business Need Commercial Auto Insurance?
Not necessarily. Let's say you own a business in which you provide online web design services remotely. You have no employees, and you never need to drive anywhere for your business using your personal vehicle. In this case, commercial auto insurance really wouldn't be necessary for you.
In any other situation where your business requires its own company cars or trucks or where you or your employees need to drive personal vehicles for business reasons, you would most likely need commercial auto insurance.
Why Do I Need Commercial Auto Insurance?
Personal auto coverage will not cover commercial vehicles, and it will not cover incidents that take place while a vehicle is being driven for business purposes.
Therefore, if you were to cause an accident while driving your company delivery van, for example, you would not have the liability coverage necessary to pay for the property damages and/or medical expenses of the other party involved. You also might not have coverage to pay for your own costs of damage.
In most states, not having the proper liability coverage is actually against the law. Furthermore, you would have to pay for these expenses out-of-pocket or risk being sued or having your business assets taken away.
What Types Of Commercial Auto Insurance Are There?
There are several types of commercial auto insurance coverages that you may be required and/or inclined to purchase to put your mind at ease and provide adequate coverage for yourself, your employees, and your business overall:
- Medical Payments, Personal Injury, or "No-Fault" Coverage
- Bodily Injury Liability (BIL) Coverage
- Property Damage Liability (PDL) Coverage
- Uninsured/Underinsured Motorist (UM/UIM) Coverage
- Comprehensive Physical Damage Coverage
- Collision Coverage
Speak with your Fulton Agency representative to find out what types of commercial auto coverage are right for your business.