What is Commercial Auto Insurance

Commercial Auto Insurance

When you need it and What it Covers

Anytime you operate a vehicle you are assuming a large amount of risk. While we have culturally made driving a coming-of-age milestone and a normal part of our daily routines, we can’t lose sight of the fact that any vehicle is still considered heavy machinery.

In case of an accident, not only will you cause damage to your vehicle, but you could cause damage to other drivers. The result is unexpected damage, repair, and medical payments resulting from bodily injury.

When driving a personal vehicle, we protect against this liability through personal auto insurance. Unfortunately, when operating a vehicle for business purposes, our personal plans often do not provide the correct amount of coverage we ultimately need.

This is where commercial auto insurance becomes important.

In the article below, we will outline the benefits to drivers and business owners alive when opting for business auto insurance including some of the most useful types of coverage your insurance company likely provides.

The Difference Between Personal and Commercial Insurance

Just like renter’s insurance doesn’t cover business liabilities, personal auto plans don’t cover commercial vehicles. This is because the needs of each group are different in both scope and price. Business insurances often have higher coverage limits to account for the increased liability of day-to-day operations while protecting a fundamentally different class of work vehicles.

While it’s best to check with your policy provider to determine whether any of your existing liability insurance covers your business vehicles, this will likely not be the case. As such, you need to purchase commercial vehicle insurance to protect your business against staggering losses should a claim occur.

Generally, you will need commercial auto insurance if your business actions qualify in any of the following criteria:

  • Transport of materials needed to complete your duties (cleaning supplies, building materials, etc.)
  • Transport of hazardous or flammable materials
  • Transport of passengers who pay for said service
  • Transport of goods paid for and delivered to a customer (such as pizza delivery)
  • Tow, freight, and trucking vehicles
  • Any company owned vehicle 
  • Any vehicle with a gross weight of over 10,000 pounds or a carrying capacity over 2,000 pounds

However, make note that each company treats their policies differently. As such, it’s important to check your individual policy to ensure you fully understand the limits of your coverage.

What Does Commercial Auto Insurance Cover?

Commercial Auto Insurance acts as an umbrella term for several different types of policies that protect you from liability in various areas of operation. These categories of coverage are similar to those found in personal policies, but commonly have higher limits to adjust for the higher expense business liabilities can create.

Collision Coverage
This type of coverage does not take fault into account and instead allocates funds to the sole purpose of fixing damage resulting from a collision.

Comprehensive Coverage
This category covers damages not caused by collision, such as harsh weather or other environmentally uncontrollable outside factors.

Liability Coverage
The broadest coverage classification, liability coverage can range across several different categories of liability. Of particular importance are Bodily Injury Liability and  Property Damage Liability, both of which protect against damage occurring to either your employees or your clients.

Personal Injury Coverage
Applied to only the drivers and passengers of vehicles under your policy, this allocates funds to treating bodily injuries that are resultant from an accident.

Uninsured Motorist Coverage/Underinsured Motorist Coverage
Covers damages caused to you by a motorist who did not have adequate insurance to compensate their action.

Preparing for the Cost

Unfortunately, with higher risk comes a higher price tag. As such, commercial policies are often more expensive than their personal counterparts to account for the added cost should property damage or bodily harm occur.

As with personal insurance, your commercial premium varies. Variance is based on a variety of factors including which insurance company you choose and what extent of coverage you need. Furthermore, policy pricing is influenced by the driving records of employees, number of vehicles insured, and even the general risk involved in your industry.

Finding the Policy That’s RIght for You

Whether you run a large corporation, a small business, or even are a sole proprietor, having commercial auto insurance is an important part of financial protection. All it takes is one mistake to send even the best business owner into a spiral of claims, lawsuits, and the perils of inadequate coverage.

We know that finding the right insurance policy is difficult, especially with the vast number of policies there are to choose from. This is why it’s important to work with an insurance specialist who is knowledgeable about the market and who can guide you to the best policy for your situation.

At the Gebhardt Insurance Group, we offer a variety of coverage from a host of major insurance carriers with an experienced staff that can help you determine the coverage you need. We can help everyone from individuals looking for a basic health policy to families, persons with pre-existing conditions, and even those who are looking to purchase life insurance.

If you have any questions, give us a call at 520-836-3244 to get a quote and make an appointment to take the final steps in insuring your business.

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Steve Gebhardt

Gebhardt Insurance Group was honored by AAA Insurance for being the top New Policy Agency in Arizona for 2013 and achieving the "Emerald Achievement Award."
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