Commercial Auto Liability Insurance for Transportation Companies: An Overview

Commercial Auto Liability Insurance for Transportation Companies: An Overview

To safeguard your transport business, you should carry commercial auto insurance, also known as business vehicle insurance. In the event of a covered accident, this coverage can help protect your business’s assets.

Who Needs Commercial Auto Insurance?

You need this coverage if:

  • Your business owns, rents, or leases vehicles.
  • Your employees drive business-owned, rented, or leased vehicles.
  • You or your employees drive personal automobiles while conducting business.
  • You or your employees drive company-owned vehicles for both personal and business use.

What Coverage Can Commercial Auto Insurance Provide Trucking Businesses?

Many of the insurance coverages you’re required to carry for your commercial vehicles are similar to what you need for your personal vehicles. In most states, you’re required to carry liability coverage for property damage and bodily injury resulting from auto accidents that occur while you or your employees are driving for business-related purposes. Besides, some states require you to carry underinsured/uninsured motorists or Personal Injury Protection (PIP), also known as medical payments coverage. You can also buy physical damage coverage for your business vehicles.

You can customize a standard business vehicle insurance policy to suit your trucking business’s unique needs and ensure that it covers the following:

  • Legal Costs

    If you’re sued due to an accident involving your business vehicle, legal defense expenses can mount quickly. Moreover, you may need to pay court-ordered judgment or settlement.

  • Medical Expenses

    If a driver or their passengers are injured in a crash, your policy can pay for their medical care.

  • Collision

    Collision coverage covers damage to your company’s vehicles irrespective of who is responsible for the accident.

  • Uninsured/underinsured motorist

    This coverage covers damage caused by motorists who either don’t have insurance or whose coverage can’t adequately cover the damage.

  • Comprehensive

    Comprehensive coverage provides the broadest form of physical damage coverage. It covers all losses, except those resulting from overturning or collision covered by collision coverage. The few exclusions of comprehensive coverage include acts of war, mechanical breakdown, and wear and tear. Perils covered include fire, flood, theft, falling objects, and glass breakage.

Personal or Rented Vehicles May Need Additional Coverage

Your commercial auto insurance covers business-owned or leased vehicles, but there could be times employees use their personal vehicles to run business errands. Typically, personal auto policies exclude coverage if a personal vehicle is being used for business purposes. Non-owned and hired auto insurance affords liability coverage for transportation professionals who’re in an accident while using their personal vehicle for business purposes.  It also covers rented and leased vehicles.

Other Important Policies for Trucking Firms

Commercial auto insurance is essential for trucking firms, but it only covers risks related to vehicles. Trucking businesses, however, face many other risks, for which you need insurance coverage. Here are other important policies you should consider:

  • General Liability Insurance (GLI)

    This policy covers the costs of third-party accidents, such as a client falling in your storage facility. To save costs, you can bundle your GLI policy with your property insurance in a BOP (business owner’s policy).

  • Marine Cargo Insurance and Trailer Interchange Insurance

    Transport businesses usually also need marine cargo insurance, a policy that covers cargo while in transit, as well as trailer interchange insurance which covers physical damage to trailers that you don’t own.

  • Commercial Umbrella Insurance

    This coverage kicks in when you incur liabilities that exceed the limits of your primary liability policies.

To find a policy that suits your needs and budget, you need to talk to an insurance agent. At 01 Insurance, we will help you find a cost-effective commercial auto liability policy that’s tailored to your trucking business’s unique needs.