How this coverage protects you
A commercial auto policy provides different coverages, including liability, physical damage, hired and non-owned auto and uninsured/underinsured motorist.
- It’s your busiest season, and your deliveries are stacking up. You’ve been careful to hire employees with good driving records, but one of your employees has a minor accident in a company vehicle. Thankfully, no one is hurt, but he is determined to be at fault. How will this affect your insurance?
Liability coverage pays claims that happen when you or an employee cause an accident and damage someone else’s property or cause an injury. Most often, a business will carry a limit of $1 million per occurrence for this. That means you have $1 million to pay claims whether they are for an injury or for property damage.
- You’re celebrating a holiday at your store, and one of your employees has offered to pick up food for the festivities. On the way back, she hits a pedestrian in a crosswalk in her personal vehicle. Could this affect you?
Another section of coverage is referred to as physical damage. This pays for damage to your car caused by you or someone you give permission to drive. This coverage is divided into “collision” and “other than collision.” Collision kicks in to cover costs to fix your car’s damage caused by its colliding with another auto or object. Other than collision, sometime referred to as “comprehensive coverage,” covers damages caused by events other than accidents. These include events like hail, theft, fire and flood.
Auto policies also have uninsured and underinsured motorist coverage. These coverages come into play when another motorist hits your car, and the driver either doesn’t have coverage or his limits are too low to pay for your claim.
Automobile Insurance obviously is needed if you own vehicles, but it is just as important when you don’t. Many auto claims occur when an employee is running an errand or making a delivery for the company in their personal car and has an accident. The employee’s policy is the first to pay, but the store’s policy is brought into the claim when the employee’s limits run out or when the business is sued directly. This coverage is called “non-owned” auto coverage, and it is crucial and very inexpensive, usually less than $100 a year.
When autos are leased or rented by the business, hired car liability and physical damage should be purchased as well.