Businesses that rely on vehicles also must protect these operations. Whenever you dispatch one of your drivers or vehicles, there’s a chance of an accident. At times, the accident might prove the fault of your driver. The business, by default, might stand to take some of the blame. In these cases, commercial auto insurance might come in handy. To cover your blame in an accident, you might need liability insurance on your policy. What is this coverage? How do you enroll in it?
Generally, your business faces few challenges to getting this coverage. Yet, you’ll have to consider your commercial assets to establish appropriate protection. Talk to your insurance provider about your financial needs, fleet and driver characteristics. These and other factors can help you establish coverage.
What’s Auto Liability Insurance?
When you drive, there’s a chance your actions could harm someone or something else. You operate a piece of heavy machinery on roads filled with other people in their vehicles. If an accident occurs, there is a chance it might be your fault.
If an accident proves the fault of the driver, those they harm might expect compensation. That’s where liability insurance comes in handy. This coverage helps at-fault drivers repay others for the losses they caused. Usually, coverage pays for:
- Bodily injuries, such as medical bills, rehab costs or lost income
- Property damage like losses to the other driver’s car
- Legal costs or other settlements for the at-fault driver
Liability coverage will prove imperative if you harm someone else while driving. It can protect your personal finances should claims arise. It’s valuable security. As a result, going without protection might put you in a financial bind.
Why Businesses Need this Coverage
Every driver needs to carry auto liability insurance. Therefore, commercial drivers need liability protection by default. Why, you ask? Consider liability coverage in the context of your business.
Businesses need to protect their income and profits. Accidents involving company drivers and vehicles might pose a risk to those assets. Those harmed by accidents might hold the business responsible for its drivers' actions. As a result, they might sue the driver and the operation to cover these losses.
Can your business’s assets withstand the losses threatened by at-fault vehicle accidents? Given that these could cost thousands of dollars, you don’t even want to think about the possibility. A severe liability suit might even damage the business beyond repair. The bottom line is, even if you can afford such losses, you don’t want to face them anyway. Auto liability insurance is there to protect you when you can’t prevent such problems.
You must buy commercial auto insurance for your vehicle. Most insurers will not cover business vehicles with standard auto insurance. Commercial coverage comes with a structure to specifically address the business’s interest in the vehicle. It’s extra security that most operations need as a result.
Not only that, most states require all drivers—commercial and private—to carry insurance. The majority of required coverage is liability insurance. For example, California requires drivers to carry, at minimum:
- $15,000 bodily injury liability coverage per one person
- $30,000 bodily injury liability coverage to more than one person
- $5,000 property damage protection
Most commercial drivers cannot skirt these requirements. You’ll need to contact your insurer to enroll in initial protection. They’ll then talk to you about specifying the coverage you need.
Getting Targeted Protection
Every business is different. Their employee drivers, vehicle and liquid assets all vary. Thus, the liability coverage each one needs will differ.
First, most businesses need more protection than a state’s minimum limits. Many liability claims will exceed lower coverage amounts. So, investing in higher protection will likely benefit the business’s overall protection. Talk to your agent about your company’s value in commercial driving. It can likely help them determine the appropriate protection. More coverage can’t hurt, and you often won’t see your premiums increase unjustly.
Don't forget, by investing in other coverage, you can extend protection to your own vehicles and drivers. For example, collision and comprehensive coverage can pay for damage to the vehicle. Ask your agent about the potential for this protection.
Depending on vehicle ownership, how you structure your liability coverage might vary.
- Vehicles owned and driven by employees will likely need commercial auto insurance. This will likely need to include liability coverage. It will often supplement their personal coverage.
- If the company owns the vehicles, it will need to support most or all the costs of commercial coverage. Liability, comprehensive, collision and other protection should be part of this policy. You can generally insure all drivers and vehicles on one policy.
So, if you are in the market in commercial auto insurance, make sure liability protection is at the top of your list. Don’t hesitate to ask your insurance agent at 855.554.6482 how you should tailor coverage for your own benefit. At the end of the day, your business will thank you.
Also Read: When Do You Need Commercial Auto Insurance?