If your small business uses vehicles to operate its business, then it’s critical
to have commercial auto insurance.
Commercial auto insurance can cover all types
of vehicles, from cars, trucks and vans that are used by you or your small business
employees in their normal course of business. The main goal of business auto insurance
is to provide protection from vehicle damage from traffic collisions or liability
that may arise from such collision. In exchange for an insurance premium, commercial
auto insurance will pay claims that are deemed valid that arise from a traffic collision.
Keep in mind that all employees who may be driving the vehicle listed on the policy
are required to meet the underwriting policies of the insurance company.
Although states enforce commercial auto insurance differently, mostly all states
in the United States require this type of insurance. For those states that require
commercial auto insurance, penalties can be assessed for not having it. Penalties
vary by state, but may include fines, license or registration suspension, license
or registration revocation, or the possibility of jail time.
Business auto insurance policies coverage may vary, but generally most policies
cover medical payments of the insured party, physical damage of the insured vehicle,
property damage to third party, bodily injury to third party and third party fire
and theft. Items such as company advertising logos and decals on the vehicle may
also be covered. Because every small business has different needs, most business
auto insurance policies can be customized. However, commercial auto insurance policies
require that the business owner specify which vehicles are to be covered as well
as potential drivers of the vehicles listed on the policy.
The amount of premium for a commercial auto insurance policy varies according to
a number of factors. As in personal insurance policies, the higher the deductible,
the lower the premium, generally speaking. These factors can include vehicle characteristics,
coverage amount, deductible, limit, covered items, age of driver, driver driving
history, gender of driver, vehicle usage and expected distance to be driven.