Understanding Business Auto Insurance

Business car insurance (also known as commercial auto insurance) is a policy that covers the automobiles used to conduct your business. It takes care of any damages, liabilities, situations, and usage that are not covered by personal car insurance. Understanding the difference between these two types of auto insurance policy is critical for your business.

Business vehicle insurance covers a range of cars, including company cars and a vast array of trucks. It also protects the employees as well as the passengers who board these vehicles. The cover is meant to help pay for medical bills and damages in case you are involved in an accident while on-the-clock.

What the policy covers

Liability coverage: If you are involved in an accident but are the at-fault party, the cover will take care of the other driver’s (victim) personal injury or property damage that arise from the crash.

Medical costs: these are funds that are released to pay for any medical expenses arising from the accident.

Uninsured/underinsured coverage: while the law requires every driver to be insured, some drivers will not have active coverage on their cars. Others are insured, but their limits are not enough to pay for the damages they have caused. In such cases, this coverage will take care of the remaining amount.

Collision coverage: accidents usually result in property damage. This type of cover ensures that your vehicle damages arising from the crash or collision with other objects like a tree or building is covered. It also applies when your car overturns or is totalled.

Physical damage coverage (comprehensive coverage): covers any repairs if your car is damaged by vandalism or is stolen, collides with an animal or is affected by specific weather events.

Roadside assistance: after an accident, you will need repairs, towing, among other help to restore the car. This cover will take care of all that.

Rental reimbursement: a majority of business car insurance policies will cover the car rental cost if you need to hire a car while your regular one is out of service.

When to purchase a business car insurance

As stated earlier, you will need this type of insurance if you have a van, truck, or any other company vehicle. The cover also comes in handy when your company cars are available for employee and partners to use as well as if you haul equipment, cargo, or a trailer from your vehicle. Additionally, the cover is essential if you or your staff frequently use a private car for business purposes. If any of these situations apply to your business, your personal car policy will not offer enough coverage.

What the business auto insurance doesn’t cover

The business auto policy protects you while driving for business purposes. However, some specific things won’t be covered by this insurance, including:

Accidents that happen while driving car rentals

Employee injury that occurs while driving

Contents that you are carrying in your car

Accidents that occur when a staff member drives their own cars for business purposes

Ridesharing for a company like Lyft or Uber

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.