Whether the size of your business and its mobile fleet is large or small, it’s essential to insure the vehicles that you’ll use during your daily operations. If you don’t have adequate coverage for your business vehicles, you could be leaving yourself vulnerable to extreme financial loss if your drivers encounter any mishaps while on the road. We’ll take a close look at how commercial auto insurance can protect your operations, and how it provides compensation.

What is Commercial Auto Insurance?

Commercial auto insurance is a category of insurance specifically designed for vehicles that are on the road for business purposes. It exists as a binding contract between you and your insurance company and clearly outlines how you will be compensated for any loss if your vehicles are involved in a sudden accident or other incident that is covered. Business vehicles can include company cars and those designated as commercial vans or trucks. 

The now quite popular food truck sector as well as box trucks can be covered by commercial auto insurance. Your personal car insurance policy does not pay on any claim if you are driving a car for business and suffer the misfortune of an accident. Here are some of the scenarios where you’ll need a business auto insurance policy:

  • A company car that is driven for work only
  • A truck or van that is company-owned
  • Any vehicle used for conducting a business service
  • A business vehicle used to haul tools or equipment
  • A vehicle with a demand for high liability insurance limits
  • A vehicle used for transporting people or goods
  • A business vehicle that your employees are designated to drive

What Does Commercial Auto Insurance Cover?

Commercial auto insurance is like personal auto insurance, with the differences being in the coverage, exclusions, and limits, and exactly who is eligible for coverage. Commercial auto insurance policies usually offer higher liability limits since there is generally more at stake if something goes wrong. Following are some of the most common different types of commercial auto insurance coverage:

Bodily Injury Liability Insurance: This pays for others’ injuries that you or any employee accidentally cause, and any legal costs that arise if you are sued over the incident.

Property Damage Liability Insurance: this type of coverage pays for damage to another person’s property if you or an employee cause an accident there. It will also cover any pressing legal costs if you happen to be sued over the incident.

Combined Single Limit: CSL provides one overall limit for bodily injury and property damage claims against you. This type of coverage simplifies the insurance structure by offering a single limit, which makes it easier for busy policyholders to effectively manage their coverage.

Personal Injury Protection (PIP): This type of coverage will pay for medical expenses and other costs, regardless of who was at fault for the accident. This type of coverage is commonly referred to as “no-fault” insurance, and it can help expedite the claims process while reducing the need for strenuous legal disputes.

Medical Payments (MedPay) Coverage: This type of coverage pays for medical expenses and other costs for you and your passengers no matter who was at fault regarding the accident. These can include surgery costs, diagnostic tests, ambulance fees, doctor’s fees, and other healthcare-related expenses. There are some limits to Med Pay coverage, as it only pays up to a certain amount for medical expenses for each incident. The policyholder is allowed to choose their specific coverage limits when they make their final decision, which can range from a few thousand dollars to much higher amounts.

Collision Insurance: This will pay to repair or replace your designated work vehicle after occurrences such as vandalism, theft, fire, suddenly falling objects, and wildlife incidents. Policyholders typically choose a deductible amount, which is what they’re responsible for paying out of pocket directly before the coverage provides for their needs. Even though collision insurance is optional in most states, it is often recommended for vehicles that are a critical component of a business’s daily operations.

Comprehensive Insurance: This coverage is designed to protect the insured vehicle from various risks and perils without involving other vehicles. This type of coverage is also considered no-fault insurance, meaning that it pays off or covers losses no matter who caused the damage. When you file a comprehensive insurance claim, the insurance company may consider the actual cash value of the property that has been damaged or stolen.

Uninsured Motorist Coverage: This coverage will pay for injuries to you and your passengers if you’re hit by an uninsured driver. This coverage ensures that the injured party is not left without compensation in this frustrating situation. In some states, uninsured motorist coverage may also extend to cover property damage caused by an uninsured driver, as well as hit-and-run accidents. Policyholders can choose their coverage limits based on their specific budget and needs. 

What Isn’t Covered by Commercial Vehicle Insurance?

There are a few vehicle types that are not covered by commercial auto insurance:

  • Personal vehicles used for work
  • Rental vehicles used for work
  • Unattached tools and equipment in a commercial truck or van. Luckily, these can be covered after theft or damage under a commercial property insurance policy. 
  • Customer vehicles, but theft or damage to your customer’s cars. This falls under the guise of problems such as severe weather, vandalism, and fire. 

Tips for Buying Commercial Auto Insurance: 

Here are some helpful pointers to assist you while purchasing commercial auto insurance:

  • Assure That you are Adequately Covered: It’s important to be fully protected from a potential lawsuit if you are in an accident and things get extreme quickly. You might want to get a liability coverage policy above and beyond Missouri’s minimum, as we tend to recommend at least $500,000 per vehicle of liability coverage.
  • Speak With an Agent: Taking the time to talk with us here at the Alexander agency of Saint Charles can help you clearly identify what’s right for your business. We can find a tailored plan that is proactive and comprehensive for the type of work and driving you are doing.
  • Add Uninsured/underinsured Motorists Coverage: This useful coverage will pay for you and your passenger’s medical bills if you are in an accident with a driver who doesn’t have any or sufficient liability insurance. After the pandemic hit, the number of uninsured drivers on the road grew even more, rendering this an important consideration.
  • Make Sure to Do Thorough Research: It’s so very crucial to thoroughly research the insurance company you have in mind for your commercial coverage. The price point is one of the deciding factors, but there are many other policy elements to consider. It’s best to make an in-depth comparison of the coverage offered and look at customer reviews for multiple entities.

There’s no room for compromise when it comes to safeguarding your precious assets. Our team of dedicated experts is committed to providing you with the solutions that fit your lifestyle best. Make the call to us here at the Alexander Agency of St Charles today and secure your fleet’s safe and prosperous future!