Chapter 7 - Business Insurance
Commercial Auto Insurance And Your Business
What Every Business Needs to Know About Insuring Their Vehicles
 Commercial auto insurance helps protect your business from unexpected medical costs and auto repair costs caused by a collision.
It can even pay out in case of an accident related lawsuit.
If you have business vehicles, having a commercial auto policy is as necessary as having tires on your car.
What is Commercial Auto Insurance?
In most states, you will be required to purchase commercial auto insurance to cover both bodily insurance and property damage that result from either you or an employee driving for the business.
Just as with your individual car insurance policy, your business auto policy will list each vehicle separately and each will have a specific coverage.
This means that you can choose different coverage per vehicle depending upon the uses of each vehicle.
If You Drive, You Probably Need It
Whether you need a business auto policy will depend on many things.
The answers to the following questions will help you know IF you need a policy, and if so, what kind of policy you will need.
- How will you use the vehicles in your business?
- Who will be driving those vehicles?
- Do you own the vehicles? Lease them? Rent them?
- Will you or your employees drive your own vehicles for business purposes?
Depending upon the answers, your personal auto policy and the policies of your employees may cover your vehicles.
On the other hand, if the vehicle is used mainly for business, it will not. Nor will a personal policy cover a vehicle owned by your business.
Three Types to Consider
There are three types of coverage for business auto insurance.
- Collision: Coverage for losses from a crash.
- Comprehensive: Coverage for losses from anything except collision. These include flood, fire, theft, etc.
- Specified perils: Similar to comprehensive, but it covers only those perils named in the policy.
The size of your fleet and the use of the vehicles will help you and your insurance agent determine the best coverage for you.
Liability Included
 Every business auto policy has a liability portion.
This portion is similar to business liability coverage, except it deals specifically with bodily injury or property damage caused by a business vehicle. However, your policy will only pay up to your coverage limit.
The standard auto coverage limit is $1,000,000. However, some go with a lower limit of $500,000.
Anything lower will almost certainly be insufficient. Although adding a higher limit adds to your premium, the difference in premium is relatively small and the benefits are well worth the price.
Three Tips for Keeping Premiums Low
There are a number of ways to keep your premiums down. The best way is to avoid claims and driving safely does this.
Other ways include:
- Keeping your vehicle well maintained
- Having auto theft devices
- Having a good credit rating
the vehicles you use for business are not covered by your personal policy and your business owner's policy does not cover your vehicles either.
If you have company vehicles such as cars, trucks, or vans, you will need to have a commercial auto insurance policy.
What's Next
Next In This Guide
 The Laws Concerning Workman's Comp - Since it is required by law in most states and for most employees, as a business owner, you will need to understand what it is and how to get it.
Previous In This guide
 You Need Business Liability Insurance - Liability insurance insures against negligence of your business or employees. In other words, it protects your business when it is sued for neglect. There are two types of liability policies:
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