Commercial auto insurance policies provide both liability and physical coverage for trucks, cars, and other types of vehicles used for business purposes. This type of policy covers medical expenses, repairs, and legal fees not included in personal auto insurance. Understanding the extent and importance of such policies is vital for small to medium-sized business owners seeking financial protection.

In this blog, we’ll discuss the extent of coverage for a commercial auto insurance policy.

Types of Commercial Auto Insurance

Similar to personal auto insurance, commercial policies are of several types and include the following:

  • Medical payment coverage:Regardless of fault, this policy covers the medical bills for both the driver and passengers in a business vehicle.
  • Liability coverage:This covers both PDL (property damage liability) and BDL (bodily damage liability) when a business owner or one of their employees is responsible for bodily or property harm to another party.
  • Comprehensive coverage: Covers damages to the vehicle from acts of vandalism, theft, weather, and other non-collision instances.
  • Collision coverage:Covers damages resulting from accidents.
  • Uninsured motorist coverage:Covers damages done by an underinsured or uninsured driver.

Business owners can also benefit from several specialized coverages not offered by personal policies. These include:

  • Hired vehicle: Covers rental vans or cars used by clients and employees
  • Trailer interchange: Covers trailers not owned by the business
  • Non-owned vehicles: Covers employees’ cars when they are used for business purposes.
  • Rental reimbursement:Covers the costs incurred to rent a temporary car while the other one is getting repaired.

Differences between Commercial and Personal Auto Insurance

The primary difference between the two is that the former is used for business purposes whereas the later covers personal usage. However, there are a couple of other nuances that set both policies apart. Commercial auto policies come with greater liability limits, are tax-deductible, can be employee-specific or all-encompassing, and include extra features.

Do You Need Commercial Auto Insurance?

All businesses that have vehicles need auto insurance policies. However, if you operate a vehicle that exceeds 10,000 pounds or is equipped with work-related modifications, a standard auto insurance policy won’t cut it.

Driving to and coming back from work is covered by a standard auto policy. But if you’re also using your car for transporting goods, equipment, or people, you may need a commercial auto policy to prepare you for worst-case scenarios.

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