Do You Need Commercial Auto Insurance?

Posted by  On September 7, 2020
What is the need of commercial auto insurance?

Commercial auto insurance is different from personal car insurance. It’s important to understand the difference between the two and make sure you’re appropriately covered.

Depending on the number and use of commercial vehicles, commercial car insurance is sometimes referred to as fleet insurance or commercial fleet coverage. It can be of benefit to you whether you’re running a small business with just one delivery truck or a large company that operates many vehicles. It’s also useful if you have employees who use their personal vehicles on behalf of your business.

We’ll help you learn:

  • How to know for sure if you need commercial auto insurance
  • What’s covered by commercial auto insurance

How do I know for sure if I need commercial auto insurance?

There are 4 main reasons you would need commercial auto insurance:

  1. You use your vehicle for work purposes

    If you use your vehicle regularly for transporting merchandise, visiting clients, or making deliveries, then you’ll likely need commercial auto insurance.

  2. The type of vehicle you have

    Certain types of vehicles — like heavy trucks — are very expensive to repair or replace, and can also cause extensive damage in case of an accident. Commercial auto insurance is, therefore, necessary for these types of vehicles.

  3. The owner of the vehicle

    If you’re the sole owner of a vehicle for a business, then personal auto insurance may be enough. If a vehicle is owned by the business or the manager of the business, then you’ll likely need commercial auto insurance.

  4. You drive for a ridesharing service

    If you drive for a service such as Uber or Lyft, check with your insurance provider about whether your auto insurance policy covers you for ridesharing. If not, you’ll require commercial insurance coverage.

What is covered by commercial auto insurance?

Every commercial auto insurance policy is different. An insurance broker can customize your insurance policy to make sure you’re getting the coverage you need. Here are some of the most common types of coverage you can have as part of commercial auto insurance:

  1. Bodily injury liability coverage

    This pays for any physical injuries or fatalities that occur due to an accident in which you are at fault. Also, if either an injury victim or a surviving family member files a claim against you, this coverage will cover your defence and court costs.

  2. Property damage liability coverage

    This pays for any property damage that occurs in an accident in which you are at fault. Similar to bodily injury coverage, property damage liability covers your defence and court fees if you are sued after a car accident.

  3. Accident benefits and medical costs

    This type of insurance pays for medical expenses for you, your passengers, and your employees if they are injured in a company vehicle in a crash. It will also help cover wages that an injured party loses due to an accident.

  4. Collision coverage

    This coverage is used to cover you when your vehicle is damaged, but you are not at fault in the accident.

  5. Comprehensive coverage

    This policy comes into play if something happens to your vehicle, but not during an accident or collision. Examples of this kind of coverage are if your vehicle is stolen or damaged by vandalism, fire, or attempted theft.

  6. Uninsured or underinsured motorist coverage

    This helps cover you in accidents caused by a driver with either no insurance or inadequate insurance. Even though car insurance is mandatory in all Canadian provinces, unfortunately, some people still drive without even minimum coverage.

  7. Loading and unloading liability

    This is important coverage to have if you are a small business owner that transport products either to customers or events, such as a catering company.

  8. Replacement car coverage

    While your vehicle is being repaired, if you need a temporary rental car or van for your day-to-day operations, this coverage will kick in.

No matter the reason you use them, you rely on your company vehicles to reach your customers. A commercial auto insurance plan helps you secure your key assets and ensure your pickup and delivery operations keep running smoothly. You can purchase a comprehensive protection plan from us at affordable rates so that if anything does go wrong, your products and services can quickly hit the road again, safely.

You’ve now learned about the various reasons you would need commercial auto insurance and what exactly is covered commercial auto insurance.

For more information about whether you need commercial auto insurance, call Archway Insurance at 902-477-2511 or contact us here.

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