Business Auto Insurance 101

You probably realize you need insurance on your business vehicles. What you may not know, however, is what commercial auto insurance covers, what vehicles need coverage, and how much insurance you’re actually going to need. To help, here’s a quick overview of commercial vehicle insurance:

What it covers: A business auto policy provides coverage for physical damage and liability costs incurred in an accident involving a company vehicle. This includes the cars, trucks, trailers, vans, and other vehicles used on public roads that your business owns, hires, or leases for business purposes.

When it’s needed: Keep in mind that your personal auto policy may provide some coverage for business use of a vehicle, but if a vehicle is primarily used for business purposes, a separate commercial policy is required. Also, basic business owner’s policies (BOPs) do not include coverage for vehicles. So, if you use vehicles in your business, you should have a commercial auto insurance policy. If you’re unsure whether a vehicle qualifies, you should discuss it with your commercial insurance agent.

How much is required: The fact is you probably need a commercial auto policy. But it’s not always easy to decide how much business auto coverage to get. The rule of thumb is that all businesses should carry a minimum of $500,000, but most companies opt to carry $1,000,000.

Consult with your agent on your individual business needs. By asking detailed questions about your needs and vehicle usage, he or she can determine exactly what type of coverage is best for you.