Commercial Auto Insurance, along with commercial liability, business property insurance, forms part of business insurance, but there is more to it. Some business owners believe all auto insurance policies are the same, or never knew commercial car insurance existed. They think insurance should cover all cars regardless of what it is used for until it is too late.
If a business requires an operating vehicle, you need commercial car insurance. Moreover, all companies should review their commercial vehicle insurance to ensure it covers as intended to avoid the coverage gap.
Consider this following scenario: if you are delivering food to your customers to fulfill online order, a contractor visiting job sites taking their expensive equipment to the worker, picking up clients from the airport on the way to show the newly listed house for sales, commercial auto insurance is needed for all above to protect the business to risk and potential financial loss. Vehicles are critical to getting a job done in business. Therefore, getting the proper business car insurance is essential for business.
Accidents happen. Should injury occurs to any driver or passenger, your business may get a substantial bill as a result. These can be in the form of medical bills or lost wages that probably be declined by the insurance company when involving a claim. Typical accidents such as loading and unloading from the vehicle when your business is transporting merchant goods or products to customers material for exhibition events.
Comparing Commercial Auto Insurance vs Personal, Commercial auto insurance is intended to protect a company on liability and physical damage for cars, trucks, and vans used to generate income. It requires a separate policy from personal vehicles because they are typically exposed to more risk.
As a business owner, you should consider the following to determine if commercial auto insurance is needed.
Should employees use their vehicle for business purposes; Always ensure they are listed as drivers on the commercial auto insurance policy.
Contractor driving between job sites, with expensive tools and equipment in the truck needing protection from theft
A vehicle owned by a business.
If you make customer deliveries frequently, involving lifting, loading, and unloading of goods
Using a vehicle for any of these:
- Transport customers or deliver merchandise, goods or materials
- Use for driver training
- Transport equipment or tools
- A big and heavy vehicle that commonly used only in commercial
Protect your business with our proper commercial auto insurance solution based on any unique needs. Get the basic business vehicle coverage with the right amount of liability coverage if anyone with access to the company car accidentally hurt someone or damage their property. Accident benefit packages available for cross Canada to provide health care for you or your employees.
So, in short, the commercial auto insurance can be seen as an extension to coverage on private auto insurance when it is decline for the above use.
Comparing Commercial Auto Insurance vs Personal
When looking into an auto insurance policy wording, commercial auto insurance is similar. It provides liability coverage, so any damage caused to other vehicles or property will have the same legal responsibility. Anyone injured in the car accident involving the insured car will be covered by their insurance company.
However, personal auto insurance will decline payment in the event of an accident should the vehicle is found being used for business. Anyone involved in a car accident while working, visiting clients, and delivering merchants or real estate persons making a business visit will decline under personal insurance. When comparing commercial auto insurance vs personal, the personal car insurance policy states that it cannot be commercially used.
Driving as a construction worker carrying tools to sites, delivering merchandise, taking passengers (such as public taxi, bus, or even ambulance) will be considered illegal without valid commercial insurance. Even the car has been on incidental use for personal errant.
Fleet commercial auto insurance vs personal
Businesses with multiple cars or trucks could get a fleet insurance policy. It will have some cost savings combining all vehicles under a single insurance policy. This is known as a fleet insurance policy, provides the same insurance coverage but often with discounted premiums.
Comparing Garage commercial auto insurance vs personal
Any businesses involved in handling vehicles that are not owned by the company will need a garage auto liability policy. This protects the company while operating vehicles owned by their customers.
A garage insurance policy is intended to protect the business by covering anyone if they are injured, damaging the company vehicle and others' property, including others' vehicles. Any staff running the business with the client's vehicle got into an accident will have coverage under the garage insurance policy.
Vehicle dealerships, automobile body shops, service stations, repair garages, tow truck operations, and parking lot owners need such garage auto insurance policy.
However, businesses involving leasing vehicles to others will not be covered under a garage insurance policy. This will be a commercial auto policy.
Optional Coverage For Commercial Auto Insurance vs Personal
The following optional coverage are available on both personal and commercial auto insurance.
- Own Damage
This option covers damage to your own vehicle, depending on the option including all Perils, Collision, Comprehensive and Specified Perils
- Family and friends Protection
This option is added to most car insurance policies. They cover when responsible drivers carry insufficient liability limits to family and friends injured in the vehicle during an accident.
- Loss of Use
This option allows a replacement vehicle due to an insured loss. There is a cap to a replacement vehicle.
- Legal Liability for Damage to Non-owned Vehicles
This provides coverage on legal responsibility for damage to an operating vehicle not belonging to the insured driver (such as a rental company's car). There is a maximum value to a vehicle it covers.
- Limited Waiver of Depreciation or Replacement Cost
Insurance will pay a depreciated value to the vehicle's damage if the accident results in a total loss. This option allows the insured to get the actual purchase price or the cost to replace depending on the selection. There may be a period this option is allowed to add to the insurance policy. Some restrictions are applied.
- Limited Glass Endorsement
This "reverse coverage" reduces the comprehensive coverage by limiting vehicle glass, and it will lower the insurance rate.
- Accident Rating Waiver
This option protects a good driving record from being downgraded due to a first "at-fault" loss. The insurance premium would not increase due to an accident. Some restrictions are applied.
- Auto Network support
Some of our partners have the option for free tow or emergency roadside support added to the policy.
The following are options only to commercial auto insurance
- Industry-based fleet insurance coverage
Multiple vehicle discount programs cater to various industries, including trucking, manufacturing, energy, realty, construction, etc.
- Garage policy
If business involving services or repairs other people's vehicles, you have liability exposure and need to have this.
- Commercial Use Endorsement
As personal insurance for cars forbids using a vehicle for a purpose other than personal, there is an add-on to make it exception under commercial car insurance. Some include permission to carry passengers, use as a driving school, carrying radioactive, toxic or explosive in the vehicle.
Some commercial auto insurance allows additional cargo coverage, such as passengers' goods or luggage up to a certain amount. For some trucks with a container, MTC or Motor Truck Cargo can request protection of customers' interest in care.
- Customs and excise bonds
Suppose a business involves in car parts for importing, exporting, manufacturing, sales, or distributing goods in Canada. In that case, we can arrange for customs or excise bond.
- Complex Risks for vehicle insurance
Transportation of goods between the U.S. and Canada needs a detailed description due to its complex nature.
Is Commercial Auto Insurance necessary if I do not disclose?
Insurance is about "utmost good faith." As insured, you declared all risks to the insurer, including should you use a vehicle to generate income. Commercial auto insurance acts as an extension for standard personal insurance, which forbids vehicles' use except for personal use.
A business will also need to have a commercial auto insurance policy if the employees operate their own vehicles. A typical company such as courier will need to have commercial auto insurance under these circumstances. In short, commercial auto insurance allows business and personal use of vehicles, while the private insurance policy is strictly for personal use only.
Selecting commercial vehicle insurance coverage that meets your specific needs is vital to protecting your business and income.
Contact us to see how we can customize the insurance to best match your business requirements.
Our commercial insurance brokers will find insurance that fits your business.
A business owner needs to consider the level of coverage they need for commercial vehicles. Third-party liability is mandatory, but other insurance coverage includes repairing or replacing damaged, or stolen vehicles, renting replacement vehicles can be added. However, we need to declare to the insurer the nature of business use and determine the right insurance available.