The Basics of Commercial Auto Insurance Policy: What You Need to Know

Commercial auto insurance covers physical damage and liability claims arising from the use of a vehicle for business operations. It provides coverages for automobile usage not included in a personal auto insurance policy. You can carry commercial auto insurance to cover your business fleet, such as company cars and trucks, or your own personal car when used for business, such as making food deliveries. Read on to learn more about getting a commercial auto insurance policy for business.
Do You Need a Commercial Auto Insurance Policy ?
A business owner’s policy (BOP) provides significant protection against business property loss and liability claims. However, this policy doesn’t cover vehicles. As such, a commercial auto insurance policy or endorsement is the only way to get coverage for any vehicle you’re using for business operations. Coverage is important, whether you or your employer own the automobile.
If you’re a freelancer or gig worker, you still should get commercial coverage for your car if you use it for business purposes like making deliveries or ridesharing. It’s important to understand that your personal auto liability policy will most likely not cover you for any third-party damage or injury you’re responsible for while making a delivery. For example, if you crashed into another car and damaged it while on a business errand, your personal policy wouldn’t cover that damage.
Here are some typical scenarios in which you’d need to carry a commercial auto insurance policy:
● Transporting business equipment using your vehicle
● Transporting goods (freight)
● Towing service
● Food delivery
● Using your car as a cab or to chauffeur Uber customers
● Transporting material
To maximize your liability protection, consider getting commercial auto insurance for all vehicles you’re using for business, including non-owned, hired, or leased cars.
Commercial Auto Insurance Policy Vs. Personal Auto Insurance
Commercial auto insurance addresses a wider range of risks that a personal policy doesn’t cover. Also, insurers generally apply an entirely different rating system for the commercial usage of cars. As a result, auto liability limits will be higher for your commercial fleet and may vary depending on your type of business and insurer.
If you own many business vehicles, consider getting a customized commercial fleet policy. In some cases, you may need to purchase commercial umbrella coverage, which will provide protection beyond the limits of your standard commercial auto insurance policy.
Keep in mind that your insurer expects you to provide accurate information regarding the “principal insured.” For example, if you’re driving for both business and personal ends, you must let your insurer know who owns the vehicle.
What Is the Cost of Commercial Auto Insurance ?
Insurers look at a range of factors to set premium rates for commercial auto insurance coverage. Many of these determinants are also used to work out the price for personal auto insurance policies. Examples include:
● Your driving record
● Driver’s age
● Credit history
● Claims history
● The size and type of vehicle
● Fleet size
● Vehicle use (what you’ll be transporting)
When you use any vehicle for work/business-related activities, you should protect it with a commercial auto insurance policy. Having this coverage can protect you when you face accident injury or property damage claims, whether you own the vehicle as an individual or a small business. To learn more about finding an ideal commercial auto insurance policy, talk to the experts at Knight Insurance Services today. We’re happy to share insights on suitable coverage options for your car or commercial fleet.

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