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Commercial Auto Insurance Policy Options: Which One Should You Consider?

Updated: September 22, 2018

Commercial auto insurance is an important form of protection for business vehicles. Even regular cars driven for business must have this form of auto insurance.

If a vehicle is driven for any business purposes, it is not covered by a personal auto insurance policy.

With commercial auto insurance, businesses and individuals who drive their vehicle for business purposes are protected against property damage and liability claims.

There are a number of different commercial auto insurance policies available to customers.

Businesses choose the best auto insurance policy based on their needs, financial situation and the state the vehicles are driven.

What are Commercial Auto Insurance Policies?

When looking at the commercial auto insurance policy options, it is important to understand what these policies cover.

Even if a personal vehicle is driven for business reasons, it requires a commercial auto insurance policy at those times.

With commercial auto insurance, businesses receive the necessary coverage and protection when their vehicles are out on the road. Policies may include only one or two vehicles, while larger policies can include an entire fleet of vehicles. The best auto insurance policy for a business depends on their specific needs and situation.

Even if a personal vehicle is driven for business reasons, it requires a commercial auto insurance policy at those times. For example, a pizza delivery person would require a form of commercial auto insurance when they are on the road because of their job.

Personal auto insurance will never cover a vehicle, or the people inside that vehicle, if an accident occurs while driving for business reasons.

Commercial auto insurance policy options include the ability to get property damage liability, liability for bodily injury to others, uninsured motorist coverage, personal injuries, bodily injury coverage and much more. Substitution vehicles for situations when the insured vehicle is damaged are also available.

What are the Commercial Auto Insurance Policy Options?

The commercial auto insurance policy options depend greatly on the type of business in question. Some businesses may only require the minimum level of coverage. For example, a pizza delivery business is not transporting any hazardous or dangerous materials, nor do they have a fleet of large trucks that need insuring.

Some commercial auto insurance policies also have rates dependent on the driving record of the individuals who are operating the vehicles in question.

In contrast, other businesses may need much more coverage. There are bulk discounts available, but businesses that transport dangerous materials will require a higher level of commercial auto insurance, which usually results in higher premiums.

Some commercial auto insurance policies also have rates dependent on the driving record of the individuals who are operating the vehicles in question. This is why many businesses conduct background checks before hiring their drivers.

Businesses that have heavy duty cargo vehicles are likely going to see higher rates, even in the best auto insurance policy they can find. These higher rates usually apply to vehicles that carry 10,000 pounds or more at a given time.

However, commercial auto insurance policies are tax deductible, which represents one advantage to businesses.

When and Why Do Businesses Need Commercial Auto Insurance?

Commercial auto insurance is a requirement for any business that is using cars, trucks or other vehicles for business purposes. In addition, any car that is registered as a commercial vehicle requires this type of insurance.

Taxis, limousines and chauffeur services all need to choose from commercial auto insurance policy options before their vehicles are legally allowed on the road.

Even if a business has employees with personal cars, those cars require commercial auto insurance if they are driven for businesses purposes; for example, delivering pizza, taking clients to the airport or running business errands in personal vehicles.

There are certain activities involving vehicles that make it mandatory to get commercial auto insurance, such as: transporting housekeeping equipment for businesses, transporting flammable items, carrying work equipment and delivering newspapers.

Taxis, limousines and chauffeur services all need to choose from commercial auto insurance policy options before their vehicles are legally allowed on the road.

The purpose of commercial auto insurance is to protect businesses and their employees in the event of an accident. Whether it is damage to another vehicle, damage to their vehicle or property damage, the relevant policy covers these events.

What is Covered in Commercial Auto Insurance Policies?

There are a number of commercial auto insurance policy options and they all have different degrees of coverage. However, a vast majority of commercial auto policies include liability coverage for property damage, bodily injury to others, personal bodily injuries and injury coverage that extends to other states.

Commercial auto insurance policies also cover medical expenses in relation to accidents – whether there is hospitalization, rehabilitation or treatment involved.

With commercial collision coverage, any damage resulting from an accident is covered, even if the insured company’s driver was at fault. This is extremely helpful for businesses where drivers are engaged in long haul journeys, where the risk of an accident increases.

Commercial auto insurance policies also cover medical expenses in relation to accidents – whether there is hospitalization, rehabilitation or treatment involved. Death benefits are also available in some policies.

Getting uninsured motorist coverage is crucial as a business. This is especially important for businesses that may not get as much collision coverage. If your vehicle gets into an accident and the other driver is at fault, but they are not insured, this coverage ensures that the expenses are paid by the insurance company.

Towing and roadside assistance coverage is also available in some policies.

Assessing the Commercial Auto Insurance Policy Options

Ultimately, it is mandatory for businesses to have some form of commercial auto insurance if their vehicles are being driven for business purposes. However, the specific policy they get depends on their individual needs.

Before getting a policy, a business should request an auto insurance policy example from the agent.

Some businesses even go as far as to get commercial umbrella policies. These umbrella policies are the best auto insurance policy available, because they provide coverage for large liability claims. For example, they protect businesses in the event of a lawsuit that may include as much as $1 million in liability.

Before getting a policy, a business should request an auto insurance policy example from the agent. These examples include specific details about the type of coverage available. By looking at many sample policies, businesses can understand what add-ons best meet their needs.

Newer businesses may veer towards cheaper policies when assessing their commercial auto insurance policy options.

However, it is very important to find the right balance between a commercial auto insurance policy that is cost-effective but still maintains a level of coverage that protects the business in the event of an accident involving their vehicle(s).