What is commercial auto insurance?

There are many businesses that own vehicles that are used strictly for business purposes: construction companies, cleaning companies, exterminators, and many other businesses. You could also be using a personal vehicle to conduct business. Commercial auto insurance covers such vehicles used for business against liability claims, theft or damage sustained during the time a vehicle is being used for business purposes.

Do you need commercial auto coverage when you already have personal auto coverage?

Well, it depends. If you use your personal car to commute to and from your business or for occasional client meetings, the personal auto coverage may be enough.

However, you may need to get commercial auto insurance if:

- You own a vehicle that's registered to your business.

- You drive your personal vehicle frequently for business.

- Your employees drive your business vehicles.

What is covered under commercial auto insurance?

Your commercial auto insurance usually covers a wide range of situations. Terms and options vary from one insurer to another, so it's vital to make sure that you understand what exactly is included in your commercial auto insurance policy.

Several types of coverage might be included in your policy; others are options which you can buy separately if you feel that you need them. You also have to choose coverage limits and deductibles. Typically, commercial auto insurance covers the following:

- Property damage liability for any damage resulting from an accident caused by you or your employees when driving your business vehicle.

- Liability for bodily injuries or death caused to others.

- Personal injuries to you or your employed drivers and passengers, including their medical expenses and total lost wages.

- Collision coverage to repair your business vehicle regardless of who was at fault.

- Comprehensive coverage for any damages to your business vehicle by anything that's not covered by collision coverage.

- Medical payments coverage to cover costs of treatment, hospitalization or funerals.

- loading and unloading liability.

- towing and labor costs.

- substitution transportation costs during the time that your business vehicle is under repair.

How commercial auto insurance works

This type of insurance policy is designed to provide coverage to any vehicle you use for business purposes, whether it's your own personal vehicle or a vehicle that is registered under your business name. As the business owner, you can buy commercial auto insurance for one vehicle or a fleet. The policy includes several different types of coverage as listed above, some of which are optional.

When an incident happens, such as extreme weather conditions damaging your business vehicle or getting into an accident, you may file a claim and be compensated depending on what's covered under your unique policy. If you or your employed driver is at-fault in any accident that injures other people or damages their property, the affected person may file a claim with your commercial auto insurer. In such cases, your insurer will cover the liability claim up to the limits set in your policy.

Most businesses buy commercial umbrella insurance to cover liability claims that could go above the limit and put their business or personal assets at risk.