Insurance for Commercial Vehicles

Auto Insurance

It is critical to have adequate commercial auto insurance if you provide company vehicles to your employees. Here are six things businesses should know about company vehicle insurance requirements.

Liability Protection is Provided by Commercial Auto Insurance

Companies require commercial auto insurance because it protects them from liability if an employee is involved in a work-related accident. It includes any vehicles used for business purposes as well as any employees who drive them.

If you or one of your employees is at fault in an automobile accident, the other driver may sue your company. Damages will be covered by your commercial auto insurance up to the policy limit.

It will also pay for any medical expenses incurred by you or one of your employees. Furthermore, depending on your policy, it may cover any legal expenses incurred by your company.

Commercial Auto Insurance is Governed by State Law

Because the state regulates commercial auto insurance, the specific requirements will be determined by the location of your business. Failure to carry adequate commercial auto insurance may result in hefty fines, exposing your company to a lawsuit.

Except for Virginia and New Hampshire, every state requires commercial auto insurance for company vehicles. In addition, if you or one of your employees are at fault for the accident, every state requires you to compensate the other driver.

Before purchasing commercial auto insurance, ensure that it meets your state’s minimum requirements for bodily injury liability and property damage liability. To determine your company’s insurance needs, contact a licenced insurance agent.

The Costs Will Vary Depending on Your Company

The average monthly cost of commercial auto insurance is $142 per month, though some businesses can pay less than that. The precise cost will be determined by the following factors:

  • The size of your company.
  • The number of vehicles that must be insured.
  • The kinds of vehicles you insure.
  • The number of employees who drive company vehicles.
  • The amount of protection you require.
  • Any occupational driving hazards.

Understand Your Insurance Coverage

Your commercial auto insurance policy will either have a split limit or a combined single limit. A combined single limit policy provides a single coverage limit for any damage or injuries sustained in an accident.

Assume you are involved in an accident that damages another vehicle and causes bodily harm to the other driver. If you have a $250,000 coverage limit, it will cover both injuries and property damage from the accident.

There are different coverage limits for bodily injuries and property damage if you have a split limit policy. This means that if you exceed your per-person coverage limit, you may be personally liable for some of the damages.

You May Require Additional Protection

You may need to purchase additional coverage depending on your commercial auto coverage and the type of work-related driving you or your employees do. For example, if your employees drive their own cars to work or if you lease or rent company vehicles, you’ll need hired and non-owned auto insurance (HNOA).

Commercial auto insurance only protects vehicles that your company owns, whereas HNOA protects vehicles that your company uses but does not own. For example, if your employees frequently travel for work and need to rent cars, you will most likely require HNOA.

Additionally, if your employees must cross state lines for work, you may require additional coverage. For example, coverage limits may be higher in the state to which your employees are travelling. If this is the case, check with your insurance provider to see if the difference will be covered.

Your Insurance Premiums May Be Tax Deductible

If you meet certain criteria, your commercial auto insurance premiums may be tax deductible. If you intend to deduct your insurance premiums, keep track of your mileage, keep all receipts, and keep a record of your driving history for at least three years.


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