Aside from the physical premises and inventory, vehicles are the next most valuable asset for a company. For businesses who need to ferry around their products between stores or deliver them to customers, their fleet of vehicles is their lifeblood. 

To ensure a business is adequately protected from damages to their vehicles or any liabilities they entail, commercial auto insurance is a necessity and usually legally required.

What Is Commercial Auto Insurance?

Commercial auto insurance, also referred to as commercial car insurance, is meant for business owners who use their vehicles for business purposes. The policy is designed to cover any costs of physical damage or liabilities caused by the business owner or any of their employees while operating the vehicle. Coverage can be purchased for both large fleets of vehicles as well as for a single car or truck used by a small business. It can cover the full range of vehicles available, provided they are self-propelled, from cars to commercial trucks.

Different types of cars fall under the following categories:

Business autos

• Cars
• Light trucks
• SUVs
• Vans

Trucks 

• Dump trucks
• Tractors

Trailers 

• Pickup truck utility trailers 
• Large dump body trailers

Some vehicles can be insured with their own custom insurance that takes into account the vehicle’s specific features and uses. These include:

• Truck insurance
• Tow truck insurance
• Van insurance
• Box truck insurance
• Dump truck insurance
• Food truck insurance

Additionally, for businesses with several vehicles, there is the option to purchase commercial fleet insurance. Fleet insurance is cheaper than buying a policy for each car separately. A fleet is defined as five or more self-propelled autos under combined ownership, used primarily for conducting business. However, some companies will define a fleet as two or more vehicles. Not all the vehicles have to be used for the same purpose. 

If you or your employees have car insurance for their personal vehicle, it might provide some coverage when the car is also used for doing business. However, it will not provide adequate coverage when the car’s use is primarily for business or owned by the company. 

What Losses Are Covered by Commercial Auto Insurance?

You can be covered for a variety of different situations. Some are part of the basic package, others are considered extras. These coverages include:

• Property damage liability – You will be covered for any damages you inflict upon another person’s property or vehicle in an accident you or a staff member has caused. This is a standard requirement in car insurance.
• Bodily injury liability – Covers you for any injuries to other parties in an accident where you or an employee is considered to be responsible, including resulting medical costs and loss of income. This is another standard requirement.
• Collision coverage – You will be covered for any damage to your commercial auto or trailer in a collision, regardless of who is considered guilty. This is typically required for financing and leasing of a vehicle or trailer.
• Comprehensive coverage – Any damage to your vehicle or trailer other than a collision will be covered under this policy. While the specific perils covered are determined by your policy, they typically include theft, fire, vandalism, falling objects, floods and other natural disasters.
• Uninsured or underinsured motorist coverage – In the event you or an employee gets into an accident caused by an uninsured or underinsured driver, you will be covered for any injuries the driver or the passengers receive. Damage to the vehicle will also be covered. 
• Medical payments – Irrespective of blame, your and your passengers’ medical bills will be covered after an accident.
• Combined single limit – Bodily injury and property liability claims typically have separate limits. However, in a combined single limit policy, the same dollar amount of coverage applies to both occurrences.

If you want additional protection for your employees, you can purchase fellow employee coverage.

You might also consider emergency roadside coverage, which will help with towing, tire changes, jumpstarts, fuel delivery and other roadside requirements. This is especially useful when your employees drive in remote locations a lot with not many service centers around.

How to Save Money on Commercial Auto Insurance

When purchasing insurance, there are ways to save a fortune in the long run. Not all policies are made equal, so know what to look for to avoid paying more than you need.

• Consider driving records – When hiring employees who will also be doing a lot of driving, review their driving records. If they have a history of accidents, then this can increase the insurance rate.
• Shop around – Always get multiple quotes before signing up for a policy. Each insurance company calculates their rates differently, so quotes can vary and offer different limits. Compare different quotes to find the best value for your money. 
• Pay upfront – Paying the entirety of your insurance bill annually, rather than monthly, can lead to reduced costs.
• Increase deductibles – Increasing your deductibles will naturally lead to lower premiums. However, ensure you are able to have adequate savings on hand if you need to pay the out-of-pocket costs.
• Combine policies – If you have multiple policies with the same company, ask if they offer a discount for bundling the policies together. 
• Secure your vehicles – Regular maintenance and upkeep will decrease the chance of anything going wrong. Adding anti-theft devices reduces the risk from theft, which also reduces risk for the insurance company and gives them reason to lower insurance costs. 
• Avoid accidents – It cannot be emphasized enough how important driving safely is. Read more about it here.

Great commercial car insurance can make a big difference for a business owner who already faces a lot of risk on a daily basis. If you need to talk to an expert, send us an email and we will help you secure your vehicles.