Commercial auto insurance allows businesses to protect their assets should an accident occur. This type of coverage is for businesses that operate fleets or use personal vehicles for business purposes. It is nearly the same as individual auto insurance, except in this case the policyholder is a business.
Commercial Auto Insurance Explained
Commercial auto insurance covers a vehicle in case of physical damage, and offers liability coverage. With a business, the policy covers any auto that serves a business purpose. This is good for business owners because when a car is in use daily for business purposes, there is a high risk for damages or some other accident.
Do All Businesses Need Commercial Auto Insurance?
Generally, any business that uses an auto for business purposes can benefit from this coverage. A self-employed professional or the business owner with only a few employees still counts as a business. Any situation in which an automobile serves a business purpose, no matter the size of the business, means commercial auto insurance is a smart idea.
In the event the automobile breaks down or someone steals it, not having insurance could really hurt the business. If the business relies on hauling items, like a trucking service, losing even one truck can cause a drop in income. It also helps to have insurance that protects employees who drive company cars.
Commercial Auto Policy Uniqueness
A commercial auto policy differs from a typical auto insurance policy. A typical policy covers the normal driving habits of the policyholder. The commercial policy recognizes that a car for business purposes has a higher chance of mishaps. A car for business purposes has a higher chance of getting into an accident simply because it gets more use than a non-commercial vehicle.
The insurance company knows that business owners have different needs than a typical car owner. This is why commercial auto insurance meets the specific needs of an industry. The policy for a trucking company with 100 trucks is different from a policy for a grocery store that has two trucks.
No matter the business, if an automobile serves a business purpose, then commercial auto insurance is a good idea.