Business Auto Insurance
What Is Commercial Auto Insurance
Commercial auto insurance is an essential component of liability coverage for business owners who own or operate business autos and other types of business vehicles in Virginia and throughout North America.
Liability For Defense and damages
Most importantly, commercial vehicle insurance covers your defense costs and damages arising from a claim against your business alleging legal liability for bodily injury and property damages sustained by someone else caused by a registered motor vehicle you are responsible for. (Mobile equipment, tractors, and other “off-road” vehicles are generally treated separately)
Commercial auto coverage will have three major components of liability coverage:
- A “per person” dollar limit for the cost of treating each person injured in an accident (other than persons insured under the policy);
- An “aggregate” dollar limit capping all insured costs for bodily injury arising from an accident regardless of the number of persons injured; and
- A dollar limit for property damage the insured is liable for.
These limits are usually displayed in a three-number format, each number representing thousands of dollars. For example, the limits expressed as “100/300/100” refer to coverage for up to $100,000 for each person injured, up to at least $300,000 for all persons injured in an accident (other than insureds), and up to $100,000 damage to someone else’s property, typically another vehicle.
Alternatively, commercial auto liability coverage can be provided under one combined limit. Instead of seeing the three-number format, you may just see one limit such as $1,000,000 which means it provides $1,000,000 coverage for your legal liability for bodily injury AND property damage regardless of the number of persons injured or amount of property damaged. In this format, it is a shared limit for bodily injury and property damage instead of broken into separate categories as in the three-number format. This is the preferred method to protect your business if you are involved in an accident.
Whatever the coverage limits in a commercial auto policy, and however they are presented, a standard policy will automatically provide liability coverage up to the legal minimum required in the state where an accident occurs, or up to the limit of the policy, whichever amount is greater.
Med pay, no fault, and UM/UIM
Besides the liability coverages mentioned above, commercial car insurance policies offer as an option coverage for “medical payments.”
The medical payments section of a policy provides an additional limit of insurance for paying medical costs for relatively minor accident injuries without requiring any finding of fault. This limit is typically much less than the liability limits ($5,000 is a common amount) and is intended to quickly address the cost of minor injuries of you and your passengers in hopes that they will not become contentious, costly claims.
The liability coverage mentioned in the previous section are “triggered” when a person insured under the policy is found to be “at fault.” However, a few other states have “no-fault” auto insurance laws, under which a driver’s own policy will pay for damages and injuries he/she/they sustain. In “no-fault” jurisdictions, the medical payments section of a commercial auto policy will provide the principal limit of recovery for the insured.
Virginia is regarded as a “tort” state, in that auto claims are typically settled on the basis of fault, but an individual or organization can purchase additional medical payments coverage for his/her/its own benefit.
Even though all vehicles are supposed to be insured for liability, that’s not always the case, and some vehicles don’t have enough insurance to fully pay for the damage and injuries they cause. Your vehicle could be struck by a motorist driving without insurance, by a “hit and run” driver who escapes responsibility, or by an insured driver whose limits are too low to compensate for your loss and who has no other means to provide adequate compensation.
For such situations, a Virginia commercial auto policy provides coverage for losses caused by “uninsured and underinsured motorists,” commonly known as “UM/UIM” coverage. Although sold in conjunction with auto liability coverage, with UM/UIM insurance, the insurance company will pay the policyholder itself, up to a separate UM/UIM limit, for the amount of a loss beyond what the policyholder received from the driver who was at fault.
Use of non-owned autos
An often overlooked but important consideration for commercial auto insurance coverage, especially for small businesses, arises when employees drive their own vehicles for business purposes.
If an employee gets in an accident while driving a personal auto to run an errand for a business, the business will often find that the employee’s personal auto insurance coverages will not cover vehicles or cover losses caused while using the vehicle for business purposes. This could leave the business responsible for a large, uninsured claim.
To protect against that possibility, owners should be aware of policy amendments, known as “endorsements,” that provide “non-owned and hired” auto coverage. These endorsements, available for additional premium from a commercial auto insurer, extend the liability insurance coverage in a commercial auto policy for the benefit of the business to the use of employee vehicles used for business purposes, rented and borrowed vehicles.
Property Damage Coverage For Your Vehicles
While Virginia requires that your commercial auto insurance covers liability, you don’t want to overlook insurance for damage to your own vehicles. Most auto insurers will offer at least two categories of property coverage:
“Collision coverage,” which pays for the costs to repair or replace a vehicle damaged in a collision, the most common cause of damage to a vehicle; and
“Comprehensive coverage,” which pays for contact with live animals, fire, wind, flood, fallen trees, vandalism, theft and damage from other hazards such as hail.
Road vehicles are the lifeblood of many businesses, and the biggest source of liability loss for most of them. Protect them and your enterprise with a sound commercial auto plan developed with the help of an experienced licensed agent.
Services We Provide
If you have a lot of vehicles, a lot of drivers or both, we can send you a list of vehicles and/or drivers to you weekly, monthly or any other timeframe that you wish for your review to make sure that you have all of your business autos insured as well as all drivers listed.
Call us today for a commercial auto insurance quote.
Other Products and Services We Offer
- General Liability Insurance
- Property Insurance
- Commercial Auto Insurance
- Inland Marine Insurance
- Builders Risk Insurance
- Professional Liability Insurance
- Cyber Liability Insurance
- Commercial Umbrella Insurance
- Workers Compensation Insurance
- Crime Insurance
