Regardless of whether you have one business-use vehicle or a full fleet of vehicles, you need to set up a policy for commercial auto insurance. In most areas, state law requires vehicles to be insured based on minimum legal requirements. If your commercial vehicles are financed by auto loans, the lenders may also have additional coverage requirements. Remember that this type of insurance provides your business with substantial benefits as well. After all, the financial loss that your business could face if you or another employed driver are in an accident could be tremendous, and coverage helps you to minimize this type of loss.
With commercial auto insurance, your policy may be broken down into specific coverage types. Liability coverage is most commonly required by law, and it helps you to take financial responsibility for damages caused by you or your employed drivers. This may include repairing damage to real estate or to other people’s vehicles. Be aware that liability coverage will not pay for any repairs to your vehicle, medical expenses for injuries that you or your employees suffer from or the loss of items inside your work vehicles.
Your auto lenders may require you to buy collision or comprehensive insurance. These policies pay for your own vehicle repairs. You may need to add a personal injury component to the policy to pay for medical expenses for you or your employees in the vehicle. Additional coverage may also be needed to reimburse you for losses related to equipment, tools, inventory or other items that are damaged or lost in an accident.
You can see that the right commercial policy can save your business a fortune in the event of an accident. However, you are required to pay the deductible for each insurance claim. You may be inclined to set a higher deductible amount so that your premium is lower. However, you should always choose a reasonable and manageable deductible amount that you can afford to pay as soon as possible. As you prepare to purchase new commercial coverage for your business-use vehicles, examine your need for required and optional coverage carefully.