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COMMERCIAL AUTO

Commercial Auto Insurance Explained

Commercial Auto Insurance is a type of insurance that provides coverage for vehicles owned or leased by a business. It’s designed to protect businesses from financial losses due to accidents, damages, or injuries caused by vehicles used for business purposes. This policy is essential for companies that use cars, trucks, vans, or any other vehicles as part of their operations.

General Coverages

Pursuant to your particular policy language, coverage provisions, and exclusions; commercial auto policies can include coverage for:

Liability Coverage

  • Bodily Injury Liability – Covers medical expenses, lost wages, and legal costs if your driver is at fault for an accident and injures someone.
  • Property Damage Liability – Covers the costs of repairing or replacing someone else’s property (e.g., a car, fence, or building) if your driver causes an accident.

Physical Damage Coverage

  • Collision Coverage – Pays for damages to your own vehicle resulting from a collision, regardless of who is at fault.
  • Comprehensive Coverage – Covers non-collision-related incidents, such as theft, vandalism, fire, natural disasters, or hitting an animal.

Medical Payments (MedPay) / Personal Injury Protection (PIP) covers medical expenses for the driver and passengers in your vehicle, regardless of who is at fault in an accident.

Uninsured/Underinsured Motorist Coverage covers the costs of damages and injuries if your driver is involved in an accident with a driver who has insufficient or no insurance.

Hired and Non-Owned Auto Coverage protects against damages or injuries caused by vehicles that are rented or borrowed for business purposes, as well as employee-owned vehicles used for business operations.

Claims Scenario

A local delivery business, ABC Deliveries, owns a fleet of delivery trucks used to transport goods across the city. One day, one of their drivers, Joe, is driving a company truck while delivering products to a client. Joe is involved in a collision accident with another vehicle at a busy intersection.

Joe, the driver, fails to yield at a red light, causing the company truck to crash into another vehicle, a private car. The driver of the car suffers minor injuries (whiplash, cuts) and is taken to the hospital for treatment. The private car sustains significant damage, with the front bumper and hood needing extensive repairs. The accident results in traffic disruption, and the delivery truck also sustains serious damage to its front end.

How Umbrella Insurance Helps:

ABC Deliveries’ commercial auto insurance includes liability coverage and collision coverage. The injured driver of the other car files a claim for medical expenses and lost wages. ABC Deliveries’ commercial auto insurance policy covers the bodily injury claim up to the policy limit (e.g., $500,000). The other driver’s vehicle requires $25,000 in repairs due to the collision. The commercial auto insurance policy covers this amount through property damage liability. The ABC Delivery truck also sustains $15,000 worth of damage. The commercial auto insurance policy’s collision coverage takes care of repairing the truck.

Contact CastleWise to discuss Commercial Auto insurance coverage.