Commercial Auto insurance: everything you need to know.

Sometimes referred to as small business auto insurance, commercial truck insurance, business car insurance, or commercial vehicle insurance, commercial auto insurance can protect a wide variety of vehicle types, including:

• Cars

• Pickup trucks

• Buses

• Food trucks

• Limousines

• Truck tractors

• Delivery vans

• Tow trucks

• Passenger vans

• Box trucks

• Cargo vans

• Flatbed trucks

• Dump trucks

• Dry van trailers

• Refrigerated trucks

These are just examples. If your business owns or leases a vehicle not listed above, a biBerk licensed insurance expert can let you know whether we can provide your small business auto insurance coverage.

Commercial vehicle insurance covers both liability and physical damage losses. Liability costs are those from situations where someone sues you related to your use of a company vehicle. For example, your employee is making a delivery in a company-owned cargo van, runs a stop sign, and hits another vehicle. The other driver may file a lawsuit seeking financial damages for their injuries and vehicle repair costs. 

Physical damage losses are costs associated with damage to your vehicles from any of several causes. For instance, a commercial auto policy can pay for repairs if someone vandalizes your company car. 

Property damage liability coverage. If your vehicle is involved in an accident that damages someone’s vehicle or property, your policy can cover the cost up to your policy limits, including legal defense expenses depending on the type of policy purchased.

• Bodily injury liability coverage. If you or your employee is driving a company vehicle and are at fault in an accident that injures or kills someone, your policy can cover related costs up to the policy limit. This typically includes legal defense expenses.

• Collision coverage. This aspect of commercial vehicle insurance pays for damage to vehicles or trailers on your policy from a collision with another vehicle or a single-car accident.

• Comprehensive physical damage coverage. This pays for damage to vehicles or trailers on your policy from something other than a car accident—like theft, vandalism, flood, fire, and other specified hazards. 

• Medical payments, no-fault, or personal injury coverage. This coverage is typically optional, but some states require a minimum amount of coverage. It’s for the medical expenses of an employee or a passenger traveling in your vehicle, regardless of who is at fault in an accident.

• Uninsured motorist coverage. If your vehicle is involved in an accident caused by a hit-and-run driver or someone who doesn’t have insurance, this coverage can pay for medical expenses and, in some instances, property damage. Underinsured motorist coverage (when the at-fault driver has insurance but not enough to cover the damage caused) may be included depending on the type of commercial auto policy you purchase.

In short, commercial auto insurance provides broad coverage for incidents involving your business vehicles.

Companies of any size that own or lease vehicles for business purposes should have a commercial auto policy. That includes one-person businesses. Coverage is especially important if your vehicles are registered to your business or you’re in the for-hire transportation industry. 

The list of businesses that need commercial vehicle coverage is long and includes: 

As broad as commercial vehicle coverage is, there are specific exclusions—activities or scenarios that aren’t covered. They include:

• Racing. Costs associated with vehicle racing aren’t covered.

• Intended or expected property damage or injuries. If an authorized driver uses your vehicle to cause intentional damage or bodily injury, your policy won’t cover related costs. The same is true if they should have expected that their actions would cause damage or bodily harm.

• Worker injuries covered by workers’ comp insurance. Injuries that should be covered by a workers’ compensation policy, aren’t covered by commercial auto insurance—even if the business doesn’t have a workers’ comp policy.  

• Mobile equipment operation. Commercial auto insurance doesn’t cover liability associated with mobile equipment like cranes or forklifts. 

• Hired and non-owned vehicles. Commercial auto only covers vehicles you “schedule” or add to the policy. So, it doesn’t cover vehicles you rent, hire, or borrow since they’re not listed on your policy. However, you can add coverage for these types of vehicles to a general liability policy or business owners policy (BOP). (See below for details.) Also, temporary rental vehicles are covered if your listed vehicle is being repaired, serviced, or suffered a total loss.

It’s essential to understand the exclusions that apply to a small business auto insurance policy. If you have questions, you should talk with one of our licensed insurance experts.

Several factors affect the cost of commercial auto insurance. They include the type of vehicle, how it’s used, the driving records of the people who will use your vehicles, and others.

But as a few points of reference, commuter/consultant use of smaller vehicles can cost $600 to $1,500 per vehicle per year. Vehicles used in for-hire trucking operations can cost $5,000 to $15,000 per vehicle annually to insure. Livery vehicles commonly cost $2,000 to $6,000 per vehicle per year to insure.

The good news for biBerk customers is that our direct-to-you approach cuts out intermediaries, which means the prices noted above may be up to 20% less than those of other providers.

The fastest way to determine your cost for commercial auto coverage is to get an instant, self-service, online quote. All you have to do is answer a few questions. Then, if you decide to buy a policy at that time or later, you can also make your purchase online.

It’s an easy way for busy business owners to ensure they have the coverage they need to protect their companies financially.

If you compare a commercial auto policy to a personal auto policy, you’ll see that their coverages are similar. They both cover liability, collision, comprehensive, medical payments (or personal injury protection), and incidents involving uninsured motorists (and, in some instances, underinsured motorists). 

But the two types of policies can be very different regarding eligibility criteria, definitions, coverages, exclusions, and limits. Consequently, you shouldn’t let the similarities convince you that you don’t need commercial coverage because you have personal auto coverage. That misconception can be very costly if (or more likely, when) an accident happens.

Hired and non-owned auto liability coverage provides your company with liability protection when a business owner or employee uses a vehicle not owned or leased by the company (a rented or borrowed car, for example) for business purposes. This coverage protects you in the event of a lawsuit, but It’s important to note it doesn’t provide payment for damage to the covered vehicle.

A common use for this type of insurance is a scenario where employees make deliveries for the business using their own car. Another example is when a company periodically rents a truck to make larger deliveries.

You can purchase hired and non-owned liability coverage as an add-on for a biBerk general liability or business owners policy (BOP). Keep in mind that this coverage only applies when someone is driving a vehicle for work purposes. For instance, if a vehicle is being used for commuting or running personal errands, the policy does not cover any incidents that occur.

Our customers that use trailers in their business will sometimes ask, “If I pull a trailer with a vehicle covered by commercial auto insurance, is the trailer protected?” The answer is “In some instances.” It depends on the trailer’s weight. 

Those under 2,000 pounds gross vehicle weight automatically have liability coverage, but you must add the trailer to your policy for theft or damage coverage. If your trailer is 2,000 pounds or more, you have to add it to your policy to have any coverage.

For restaurants that offer delivery service, auto insurance is essential. But what type of coverage is needed? The answer to that question depends on who owns the vehicle used for deliveries.  

It’s common for restaurants to have employees use their own vehicles for deliveries. If that’s the case, the company should add hired and non-owned liability insurance to its BOP or general liability policy. If, on the other hand, a restaurant owns or leases vehicles, they should be listed on a commercial auto policy. 

And the same applies to non-delivery uses. If employees make trips to purchase supplies for the restaurant, go to the bank, or perform other work-related tasks, the ownership of the vehicle used determines the type of auto insurance required. 

The key is to have protection for any work-related vehicle use. Even traveling to a destination a few blocks away can lead to an incident and a lawsuit or vehicle damage. There’s no such thing as a zero-risk trip!  

How can commercial vehicle insurance protect your business? Here are just a few real-world examples:

• Bodily injury liability coverage. Your employee is driving a company cargo van to get supplies when they run a stop sign and collide with another vehicle. That driver suffers injuries, the court finds your employee to be at fault, and it requires your business to pay more than $30,000 in medical bills, court fees, and other costs.

• Property damage liability. Your crew member is backing a pickup into a homeowner’s driveway and hits the garage door. The customer sues you and is awarded $6,500 for repairs.

• Comprehensive physical damage coverage. Vandals damage several company vehicles on your lot, breaking windows, painting graffiti, etc. The cost of repairs is over $25,000.  

Fortunately, your commercial auto policy can cover these incidents. That means your business doesn’t have to pay for the repairs. 

Business insurance companies look at your company’s claims history, employee driving records, and other factors when determining your business auto insurance cost. The more claims you have or the more incidents your drivers have had, the higher your rate is likely to be. So, taking action to reduce your accident risk also helps keep your insurance cost low.  

Take the five steps below to promote safe driving at your company:

1. Check applicant driving records. Potential employees with a history of traffic offenses and accidents pose a greater liability risk to your business. Obtain a report from your state’s Department of Motor Vehicles and review it carefully. The applicant will likely have to sign a release form to give you access to the report. You should also check the driving record of existing employees who are changing roles and will have driving responsibilities.

2. Document your safety rules. People have different driving experiences and habits. But you can “get everyone on the same page” by defining and explaining your expectations for employees who drive company vehicles. It’s also helpful to offer incentives for safe driving and be clear about disciplinary actions for those who violate your rules.

3. Train employees on safe driving practices. Training helps employees connect your safety rules to real-world driving behaviors. Both online training and live instruction can be helpful.

4. Prohibit calling or texting while driving. The use of devices while driving is dangerous. You should have a strict rule prohibiting texting or making calls while driving. You should also instruct employees in your office or at a job site not to attempt to contact coworkers when they’re on the road.

5. Buy vehicles with good safety records. Some vehicles are designed in a way that makes them safer and less prone to accidents than others. That includes optional features that help drivers operate them safely. You should purchase vehicles with high safety ratings and get the optional safety features. 

Whether you need insurance for commercial trucks, cars, or other vehicles, maintaining adequate coverage means you don’t have to worry about the ever-present risk of an accident. Instead, you can focus on operating your business, knowing you can rely on biBerk if an incident occurs.