Commercial Auto Insurance Policies – A business auto policy (BAP) covers cars, trucks, vans, and other vehicles used by a company in the course of conducting business. Coverage may include company-owned or leased vehicles, company-operated vehicles, or employee-owned vehicles used for business purposes. BAP covers liability and damages. A commercial automobile insurance policy is also known as a commercial automobile insurance form (BACF).
A commercial auto policy provides coverage for any company-owned vehicle that is driven on public roads. BAP coverage is selected for each insured vehicle individually, and different carriers belonging to the same company may have different amounts and types of coverage.
Commercial Auto Insurance Policies
Businesses, even if they do not own the vehicle, should obtain a commercial auto policy if they may use their personal vehicle for business purposes at any time. This coverage is especially important for employees who use their personal vehicles to perform business duties. Employees may not have adequate liability insurance to adequately protect the business in the event of a serious accident.
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The agent uses the commercial auto insurance form to set up an insurance policy for the business owner. A commercial coverage policy determines the number and type of vehicles covered, the cause and type of damage covered, and the obligations of the insurance company and business.
BAP covers injuries or financial losses resulting from any vehicle accident, as well as any costs associated with repairing damage to your vehicle. Managers should not rely on personal auto insurance policies because these policies generally do not cover losses incurred in the course of business.
A BAP usually consists of five sections, namely (1) Covered Vehicle, (2) Liability Coverage, (3) Physical Damage Coverage, (4) Commercial Vehicle Terms, and (5) Commercial Definitions.
Policyholders should pay close attention to the numerical symbols on the policy statement that identify the covered vehicles for each type of coverage. These symbols are called automatically assigned override symbols and are represented by numbers. Each symbol represents a type of covered car. For example, symbol 1 means “any car” and symbol 2 means “only cars owned by”.
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BAP coverage should include property damage coverage and liability coverage. Additionally, if the vehicle is a rental, or the company makes regular payments, a certain level of insurance may be required.
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Commercial Auto Insurance Quote & Cost 2023
Commercial auto insurance is a type of commercial insurance that covers motor vehicles used for business purposes such as carrying inventory, transporting passengers, and traveling to customer locations or project sites. Your personal auto policy does not cover accidents that occur during business activities.
Similar to a personal auto insurance policy, commercial auto insurance includes liability coverage as well as other government-required coverage, such as motorist insurance coverage. Business owners can also add physical damage protection for an additional fee.
Some insurance companies charge commercial vehicle rates as low as $91 per month, depending on your business. Read on to learn how commercial auto insurance protects you and how it works.
Commercial auto insurance is similar to personal auto insurance in that it covers damages and injuries caused by an accident. Key Differences: Commercial insurance is designed specifically for vehicles used commercially, such as delivering inventory, traveling to customers or project sites, or if you sell from the vehicle itself, such as a food truck.
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A basic commercial auto policy meets your state’s minimum coverage requirements, including liability coverage. This coverage provides financial protection when a commercial vehicle is responsible for property damage or injury to a third party. For example, if your employee is involved in an accident with another vehicle while driving a company vehicle, commercial auto insurance will cover the cost of repairing the other driver’s bumper and any injuries to that driver.
Depending on your state, a basic commercial auto policy also includes bodily injury coverage and uninsured/underinsured motorist coverage (more on the different coverages in the next section). Only New Hampshire and Virginia have flexible laws that allow certain drivers to drive without commercial auto insurance. However, they must show evidence that if they were responsible for the car accident, they would be liable for the damages.
Depending on your insurance company, you may be able to get commercial auto insurance when you drive a commercial vehicle for personal use. However, the reverse does not apply.
Personal auto insurance does not cover traffic accidents that occur while driving the insured vehicle for business purposes.
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Commercial auto insurance covers employees who drive motor vehicles for business use. In some cases, it may even cover family members who drive company vehicles. Confirm these details with your insurance company.
If your business has multiple commercial vehicles (such as a car or truck rental company), then you should consider commercial fleet insurance. If you only want to insure a few company cars, a commercial car insurance policy is more appropriate. Business models that require the use of multiple commercial cars, vans or trucks should ask their insurance company about fleet insurance.
If your business often uses vehicles for business purposes, then you should have a commercial auto policy. Common types of businesses or professions that benefit from a business policy include:
If you deliver food or passengers for a company like Uber or Lyft, you may also be protected by that company. However, you are only covered when your order is completed. Once you arrive at your destination and complete your order, your personal auto policy will remain in effect until you accept a new order.
What Does Commercial Auto Insurance Cover?
According to Next Insurance, average monthly auto insurance rates range from $91 to $223 per month, depending on your business or occupation. Other factors that may affect your premium include the type of car you drive, whether you also drive a company car for personal use, your claims history and your driving record.
Bodily injury and property damage liability are the most common types of coverage because they are required in almost all states. Below are other types of coverage that may be mandatory in your state, as well as optional types of coverage.
Insurance companies offer endorsements, which are add-ons to your primary commercial auto policy that offer unique benefits. For example, if your vehicle breaks down suddenly, Roadside Assistance covers towing and start-up costs, and Inland Marine Endorsement covers your equipment and tools during transport. Here are some common diagnostics that may be useful for your business.
Any motor vehicle used for business purposes, such as a delivery van or food truck, should be insured under a commercial vehicle policy. Otherwise, you will have to pay out of pocket for any losses incurred during your business activities.
Commercial Auto Insurance Costs
Personal auto policies only cover commercial vehicles used for personal use, such as driving to the grocery store. Any accident that occurs while driving a car at work is not covered.
A personal auto insurance policy provides coverage for your vehicle for personal use, while a commercial auto insurance policy covers accidents that occur during business activities, such as traveling to a customer’s location or transporting construction materials.
Dan Marticio is the company’s director of content and has written more than 150 articles on several insurance industries. His previous experience writing in the small business and personal finance sectors has brought him to leading fintech brands such as LendingTree, ValuePenguin, Fundera, The Balance and NerdWallet. His guides continue to be dedicated to helping everyday consumers and entrepreneurs make informed decisions about their finances and business. Commercial car insurance is very similar to personal car insurance. Many of the same obligations covered by personal insurance are also covered by commercial insurance. The main exception between these two types of coverage is the eligibility requirements. If for any reason the vehicle you are seeking cover for is driven in a commercial capacity, meaning that you pay for the transport of goods/people, or you normally transport large quantities of items, you will need vehicle cover. Get the commercial.
In most cases, commercial auto insurance is required when the vehicle is used for commercial purposes and meets certain other requirements. It’s not just
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