Commercial Auto Insurance 101

Commercial auto insurance is a business insurance policy that applies to autos owned by or used in your business that protects your business against liability for damages caused by accidents involving your business autos and provides certain compensation to occupants of your business autos injured in accidents. If your business owns vehicles, a commercial auto insurance policy can provide valuable financial protection to you and your employees while driving a company owned vehicle or a hired or personally-owned auto in your business operations. It's important to know that a personal automobile insurance policy usually does not cover vehicles used in the operation of your business.

Commercial auto insurance typically provides coverage for: liability damages; collision or comprehensive physical damage loss to your business autos; medical expenses for injury to occupants of your business autos; and damages sustained by occupants of your business autos due to the negligence of an uninsured or underinsured motorist.

The commercial auto policy provides physical damage coverage for vehicles you own, lease, hire or use in your business and liability coverage for bodily injury and property damage caused to others by your use of the insured business vehicles.

It can include two types of physical damage coverage for your insured vehicles:

• Collision loss: damage from auto accidents.
• Comprehensive loss: damage from weather, theft and other non-collision causes.

It also includes two types of liability coverage:

• Bodily injury coverage: for accident-related injuries to others when you're at fault.
• Property damage coverage: from accident-related damage to someone else's property, such as a car or house, when you're at fault).

If you own, lease, hire or use vehicles for business, you should minimally carry liability coverage. It's mandatory in most states for owned autos. In addition, businesses that move goods or people across state lines are required by federal law to have it. For larger commercial vehicles, you may need a commercial truck insurance policy.

You need commercial auto insurance for vehicles that:

• Are used for business.
• Carry a commercial license plate or tag.
• Are registered commercial.

You should also carry commercial auto coverage if you or your employees use vehicles for work-related tasks, such as:

• Driving clients to the airport;
• Going on sales calls;
• Taking packages to a shipper;
• Shopping for office supplies.

Important to know: You may be required to get additional coverage if you use vehicles for certain functions, including:

• Delivering food, products or publications;
• Acting as a chauffeur, taxi or limo service;
• Transporting flammable or hazardous materials;
• Carrying equipment;
• Towing vehicles;
• Trucking and moving freight.

Commercial auto insurance covers vehicles used for business and the people who drive them.

If you or a driver of your business vehicle causes an accident that injures another person or damages their property, they can file a claim on your policy and bring a lawsuit against you or the driver. Your liability insurance will cover costs to pay damages on the claim up to the policy limit. You or your business will be responsible for any amount of damages above the limit. Your liability insurance will also cover the costs to defend you or the driver of your business vehicle in an accident-related lawsuit, separate from the policy limit.

Many types of coverage are available. Some of the most common coverages include:

• Collision coverage pays for accident-related damage to your insured business vehicle.
• Comprehensive coverage pays for damage to your insured business vehicle from non-collision causes such as theft, weather, vandalism or fire.
• Rental reimbursement pays for a rental vehicle, up to certain limits, after an accident causes damage to your insured business vehicle.
• Liability coverage pays injury damages to others and damage to other people's property if you are at fault, including your legal expenses if you're sued.
• Uninsured or Underinsured Motorist coverage pays for injury damages to or property damage suffered by occupants of your insured business vehicle if the accident is caused by an inadequately insured driver.
• Personal Injury Protection pays medical expenses and income loss for accident-related injury suffered by occupants of your insured business vehicles, regardless of fault.
• Medical Payments coverage pays medical or funeral expenses for accident-related injury suffered by occupants of your insured business vehicles, regardless of fault.

These coverages are available for autos you own and may be available for autos you hire or lease or for non-owned autos (autos used in your business that you don't own, hire or lease). Some of these coverages vary by state. If your autos are garaged out of state, check with your agent to ensure you have adequate coverage for the states where your insured autos will be used.

Personal use of a business vehicle is generally covered by a commercial policy. However, certain coverage for family members is often not provided. Check with your agent to determine whether you need additional coverage for family use.

You can purchase commercial auto insurance through an independent insurance agent. They'll take time to understand your business operations and vehicle use so they can find optimal coverage at a fair price. Your agent will also guide you through the claims process when an incident occurs.

Using one agent for all your business insurance may help ensure your business has maximum protection and you aren't paying for unnecessary duplicate coverage.

It depends. The price is based on factors including:

• Business size;
• Number and types of vehicles insured;
• Number of employees driving vehicles insured;
• Costs of vehicles hired;
• Business and driving risks;
• Amount of coverage.

An agent can help you find affordable coverage.

Sometimes they can be deducted when a vehicle is used for business. Check with your tax expert to find out for sure.

You've worked hard to build your business. Learn more about how Travelers insurance coverages are built to help protect it.