When your driving is a major part of what you do for your living then you may have to get adequate commercial insurance protection. Most personal insurance automobile policies may deny a claim if you were driving your vehicle for a commercial purpose. Commercial auto policies may cover you while driving for a business purpose as an independent contractor or fleet owner. If you drive for a company then they may have a commercial policy for their fleet. A fleet policy is a better option for large businesses with several vehicles in terms of convenience and pricing. So, advanced & professional drivers may need to get coverage beyond the scope of a personal auto policy.
Commercial auto policies for a fleet of vehicles rates may depend on the driver records of employees who drive those vehicles. If their driving record is not up to the mark and has violations then you may pay higher rates. So, it is always a wise idea to do a background check on the employees you hire to drive your vehicles. Most vehicles used for farming and construction business may cost the least to insure. Passenger transportation vehicles and small delivery vehicles may cost a bit more to insure. Heavy-duty trucks for hauling cargo may cost the most for insurance especially if they haul over 10000 lbs loads.
What Type Of Insurance do You Need For Business?
When you are a professional driver then you may need commercial auto insurance to adequately cover all your needs. It may be a bit more expensive than a personal auto policy since there is more risk of insurability. As a professional driver, you may spend more time driving and could be on the road rather than simply commuting. You may drive more frequently under busy traffic conditions and this increases the chance of a collision. The more exposure that you have on the roads, the greater is the likelihood of an accident as per your insurer. This is the reason they calculate higher premiums for commercial auto insurance.
The insurance companies also factor in the cost of cargo or stock that you carry in your vehicle and the value of your vehicle itself. You may drive a special vehicle as per your business needs and this would be more expensive. These vehicles may have a higher cost of repair, maintenance, and replacement; an example is a refrigerated truck. If you transport passengers too then your liability risk is increased manifold that would reflect in your higher premiums too. When your business grows and your need for vehicles and drivers increases, it is best to change your coverage too. If you are underinsured then when one of your vehicles is in a collision then you may have a big problem to deal with.
Who Needs Commercial Auto Insurance?
If you drive a vehicle or have drivers for a fleet of vehicles then you may need commercial auto insurance. When you have a personal auto policy, you may not claim any damages to your vehicle while using it for commercial purposes. The various types of business use for a professional driver may be as follows:
- If you use your vehicle to carry or transport tools and equipment for business purpose
- When you transport hazardous or flammable goods
- Use or carry transporting cranes, plow or a winch
- Give your vehicle on hire for towing other vehicles
- Deliver any wholesale or retail goods; an example of this is Pizza
- Distribute newspapers
- Transportation and freight services using commercial trucks
- Transport passengers in your vehicle as a taxicab, chauffeur, or limousine service
For certain types of commercial purposes, you may need a customized auto policy to tailor as per your business needs.
What Is Included In Commercial Auto Insurance?
Commercial auto insurance may have many components to adequately provide coverage for your business use of the vehicle.
- Liability coverage for any loading or unloading of goods as well as damage to goods and injury to third parties, drivers, passengers.
- Personal injury coverage for loss of wages, medical bills, etc. for you, your employees, and passengers
- Optional coverage may include Collision coverage to protect against any at-fault accidents caused by you or your employees. Comprehensive coverage will help to claim for damages to your vehicle other than by collisions.
- Mandatory uninsured & underinsured motorist insurance
- Cost of towing and labor expenses
Most professional drivers may buy a commercial umbrella policy to protect against huge liability claims and lawsuits. The commercial auto policy will cover you for the cost of repairing or replacing your vehicle when there is damage. So, you and your employees may claim damages while using the vehicle for business purposes. Each insurance company may calculate and provide coverage as per your specific criteria. Some of these factors include the size of your business, profile, the number of vehicles that you use for the business, etc. Every business may differ and insurers may consider all risk factors to give you adequate coverage.