What is commercial auto insurance?
As a businessowner, you need some of the same insurance coverages for the cars, trucks, vans or other vehicles you use in your business as you do for vehicles used for personal travel.
Your Businessowners Policy (BOP) does not provide any coverage for vehicles, so you must have a separate policy.
Most states require you to purchase liability insurance for bodily injury and property damage that may result from a vehicle accident occurring while you or someone from your organization is driving on business. Many states also require you to have uninsured/underinsured motorists coverage and/or medical payments coverage (known as Personal Injury Protection (PIP) in some states). You can also purchase physical damage coverage for vehicles your business owns, leases or hires.
The Business Auto Coverage Form (BACF) is the most commonly used contract for providing business auto liability insurance. Although the form refers only to “autos,” autos are defined to include cars, trucks, trailers, vans or other vehicles designed for use on public roads.
Each vehicle you use in your business can be separately “scheduled,” or listed on your policy along with corresponding coverages. In other words, you can choose different coverages, for your various vehicles, depending on the vehicle’s characteristics and the coverage you need for it.
Typical coverage includes:
Bodily Injury Liability - Coverage for damages that involve bodily injury to others for which you become responsible under law.
Property Damage Liability - Coverage for damage to property of others for which you become responsible under law.
Medical Payments - Coverage for reasonable and necessary medical expenses and funeral services for those who are accidentally injured while in your automobile or while getting into or out of your automobile.
Personal Injury Protection - Coverage for medical, hospital, rehabilitation, loss of wages or loss of services costs resulting from injury to you or any resident family member. In case of death to the insured or a resident family member, death benefits and survivor benefits, if applicable, will be provided.
Other coverage that may be obtained include:
Comprehensive - Protection for the loss of or damage to your vehicle and its equipment from all causes except collision, subject to the deductible on the policy.
Collision - Protection for the collision damage to your automobile and its equipment, subject to the deductible on the policy.
Uninsured Motorist - Coverage allows you to recover bodily injury damages due to an accident where the other party does not have insurance, and is found legally liable.
Underinsured Motorist - Coverage allows you to recover bodily injury damages due to an accident where the other party is found legally liable and does not have adequate liability limits.
Additional Expense - Coverage for necessary additional expenses incurred as a result of a loss for which you are protected under comprehensive or collision coverage. These expenses include rental cars, food, lodging and other incidental expenses.
Hired Auto Liability Coverage - Covers liability for automobiles hired under contract on behalf of or loaned to the named insured.
Hired Auto Physical Damage - Coverage for an automobile of any type, hired, borrowed or leased on a short term basis for use in the insured's business.
Employer's Non-Ownership Liability - Coverage for a private-passenger automobile used in the business of the named insured by any person, or the occasional and infrequent use of a commercial automobile in the business by any of your employees.