Commercial auto insurance is a form of business insurance that protects against physical damage to an organization’s vehicles (cars, trucks, etc.) and certain types of liabilities. According to Statista, net premiums earned in the commercial auto insurance industry in the United States in 2017 totaled $29.56 billion – a figure that has been gradually rising since 2011.
Typically, commercial auto insurance policies offer higher limits than personal auto policies. This is because oftentimes, commercial vehicles carry higher values than personal automobiles. Additionally, a business may often experience more severe consequences (financial and otherwise) from a damaged vehicle than an individual might suffer after his/her car sustains damage.
The Benefits Of This Policy
Your company may benefit from acquiring commercial auto insurance for several reasons. Here, we will focus on three of these reasons: protection of company vehicles, defense of employee drivers and security in the event of a car accident.
Protection Of Company Vehicles
Most states have laws that require a minimum level of insurance coverage for any vehicle, and this includes automobiles used for business purposes. Certain commercial auto insurance policies provide specialized coverages, (sometimes at no additional cost) such as physical damage to vehicles that are rented or borrowed for business purposes. The type of policy you obtain will depend largely on your business’s needs.
Protection Of Employee Drivers
Just as it is important to protect your company’s vehicles, it’s critical that your drivers are covered in the event that they sustain any injuries while driving a company vehicle. To be extra safe, you may even wish to provide protection for employees who only serve as drivers on an emergency or “as-needed” basis (i.e. stand-ins). The average commercial auto insurance policy will cover your company against lawsuits resulting from at-fault accidents, which can often be extremely costly and thus lead to profit losses. Be sure to ask your insurance professional whether your policy covers employees who become injured while driving rented vehicles.
Shielded In The Event Of A Car Accident
Automobile accidents can occur nearly anywhere, especially in urban areas with heavy traffic. If your business is located in such an area, it is especially important to carry commercial auto insurance coverage. Collisions that involve business vehicles can often lead to lawsuits, which may be particularly costly if a driver or passenger suffers any injuries. The amount of medical expenses and attorney’s fees alone can sometimes represent a six-figure sum.
According to the Insurance Information Institute, only a Business Auto Coverage Form (BACF, a contract frequently utilized to provide commercial auto insurance) can offer the degree of liability coverage ($500,000 is the minimum amount recommended) that even a small company would typically need to pay for all damages following a severe accident.
There are three types of physical damage coverage that an auto insurance policy may offer for motor vehicles: collision, comprehensive and specified perils.
- Collision coverage provides protection against losses resulting from either a crash between a covered vehicle and any object or an automobile that overturned.
- Comprehensive coverage is designed for losses resulting from any cause except collision, overturn, and certain policy exclusions (e.g. mechanical breakdowns, wear and tear, etc.). Fires and floods are generally covered under comprehensive insurance policies.
- Specified perils coverage is similar to comprehensive, although this type of policy generally carries lower premiums because it merely covers perils that are specifically listed or “named” in the policy. Examples of specified perils include fires, earthquakes, windstorms, hail, and theft and vandalism. In some cases, specified perils may be covered under a comprehensive auto insurance policy.
Regardless of the number of vehicles your company operates, you should seek to acquire one of these three types of physical damage coverage policies – especially for your most valuable automobiles.
Work With The Commercial Auto Insurance Experts
Contact the professionals at Southern State Insurance for more information on commercial auto insurance and how this may benefit your business. Founded in 1992, we are based in Alpharetta, Georgia but are dedicated to serving the insurance needs of clients located throughout the Southeastern U.S. We are a family-owned, independent agency that works with nearly every major insurance carrier.
At SSI, we offer auto liability coverage, which covers the costs associated with injury or property damage to the other driver in the event of an accident where your driver is at fault. We also provide collision coverage, comprehensive coverage, (which carries a set deductible) and medical payments coverage. We also cover several different types of business vehicles, including taxis, ambulances, trucks, and commercial vans. Call Southern State Insurance today at (888) 971-6304 or contact us online to request a quote and learn more about our commercial auto insurance policies.