Finding the right commercial auto insurance policy to protect your business assets and your employees against unnecessary financial loss and the threat of a lawsuit is one of the most important decisions you’ll make as a business owner.
The first step in selecting the right policy is to understand the various types of commercial coverage available. In commercial auto insurance, vehicles are broken down into two main categories:
- Private passenger-type autos − cars, SUVs, small trucks, vans
- Trucks, tractors, and trailers − pickups, tow trucks, dump trucks, flatbed, semis, garbage, tractors, tanks, cement, refrigerated box, utility, travel, dry freight, auto hauler, flatbed, livestock and horse, bulk commodity, dry freight
General commercial auto insurance
These policies consist of six types of coverage:
- Liability insurance − If you cause an accident, liability coverage protects you against damages. It also provides you with a legal defense if the other party files a lawsuit against you. Property damage liability pays for damage you cause to the other car or their property. Bodily injury liability pays for covered injuries or death caused by the car accident. This type of insurance is generally required by most states.
- Collision insurance −If your vehicle hits another vehicle or an object, or is hit by another vehicle, or your vehicle overturns, collision insurance pays for damages to your car. If you have a loan or a lease on your vehicle, collision is generally required.
- Comprehensive coverage − If your vehicle sustains damages caused by something other than another vehicle, such as a fallen tree or an animal, or your vehicle is vandalized, your comprehensive coverage kicks in. As with collision insurance, comprehensive coverage is generally required if you have a loan or lease on your vehicle.
- Medical payments coverage − If anyone in your vehicle incurs medical expenses as a result of a car accident, regardless of whose fault it is, those bills are paid under medial payments coverage. Some states cover medical payments (and sometimes even loss of wages) under what’s called personal injury protection, also known as no-fault insurance.
- Uninsured/underinsured motorist – If you are hit by a motorist who is either not insured or does not have enough insurance, uninsured/underinsured motorist coverage pays for damages and medical costs caused by that accident.
Specialized commercial auto insurance
Many American businesses require use of specialized vehicles to perform daily activities. Here are some common types of custom coverage designed to protect specialty vehicles in the most comprehensive fashion.
Food service trucks that transport and sell food-related products have become increasingly popular in the last decade. According to IBISWorld, roughly 4,000 food trucks are operating in the United States as of 2015. From ice cream products requiring refrigeration to gourmet creations, food service vehicle insurance provides customized insurance options specific to food trucks.
Designed to mitigate risk, policies often cover damage inside the truck resulting from accidents such as a stove fire. Coverage can also extend to employees who drive other vehicles (such as to pick up ingredients) while the truck is in-service.
In hauling a variety of tools across town multiple times per day to make lawns and yards look well-manicured, landscapers are exposed to a unique set of hazards and risks. Wheelbarrows, chainsaws, and tillers are just a few examples of equipment regularly used at job sites.
These policies are designed to specifically protect landscaping businesses from common hazards they experience while on the road, such as equipment falling off a truck or a collision with another vehicle between job sites.
For skilled workers, such as plumbers, electricians, painters, and carpenters, their vehicle is the backbone of their business. A truck that is out of commission for days can result in loss of customers, jobs, and ultimately income. Whether driving a pickup truck or a van, hauling equipment and delivering orders make trade professionals particularly vulnerable to accidents on the road.
Policies designed specifically for trade vehicles can significantly offset the increased hazards that skilled workers are exposed to while on the road.
No matter what type of business you own or vehicle you drive, your commercial auto insurance carrier can be customized to best fit your needs.