Commercial Auto Insurance: A brief overview for Insurance Agents
As an insurance agent, one of the key products you may offer to your commercial clients is commercial auto insurance. Commercial auto insurance provides coverage for vehicles used for business purposes, such as company cars, trucks, and vans. This type of insurance is essential for any business that operates a fleet of vehicles, as it provides protection for both the company and its drivers. Below is a brief overview of commercial auto insurance, including what it is, how it works, and what types of coverage are typically included.
What is Commercial Auto Insurance?
Commercial auto insurance is a type of insurance that provides coverage for vehicles used for business purposes. This includes a wide range of vehicles, such as cars, trucks, vans, and buses, that are used by businesses to transport goods, equipment, and people.
Commercial auto insurance is similar to personal auto insurance in that it provides coverage for property damage and bodily injury resulting from an accident. However, commercial auto insurance policies typically have higher coverage limits and are designed to protect businesses from the unique risks associated with operating a fleet of vehicles.
How Does Commercial Auto Insurance Work?
Commercial auto insurance policies are typically written on an "any auto" basis, which means that the policy covers any vehicle that is owned, leased, hired, or borrowed by the business. This provides flexibility for businesses that have a variety of vehicles in their fleet.
Commercial auto insurance policies typically include several types of coverage, including liability coverage, physical damage coverage, and coverage for uninsured and underinsured motorists. Let's take a closer look at each of these types of coverage.
Liability Coverage
Liability coverage is the most important type of coverage included in commercial auto insurance policies. This coverage provides protection for the business if one of its drivers causes an accident that results in property damage or bodily injury to a third party.
Liability coverage is typically divided into two categories: bodily injury liability and property damage liability. Bodily injury liability provides coverage for medical expenses, lost wages, and other damages that result from injuries sustained in an accident. Property damage liability provides coverage for damage to other vehicles or property that results from an accident.
Physical Damage Coverage
Physical damage coverage provides protection for the business's vehicles in the event of an accident, theft, or other covered event. This coverage is divided into two categories: collision coverage and comprehensive coverage.
Collision coverage provides protection for the business's vehicles in the event of a collision with another vehicle or object. Comprehensive coverage provides protection for the business's vehicles in the event of theft, vandalism, or other covered events.
Uninsured and Underinsured Motorist Coverage
Uninsured and underinsured motorist coverage provides protection for the business and its drivers in the event of an accident with a driver who does not have insurance or who has insufficient insurance to cover the damages.
This coverage is important because it can be difficult to recover damages from an uninsured or underinsured driver. With this coverage, the business can be sure that it will be compensated for damages regardless of the other driver's insurance status.
Conclusion
Commercial auto insurance is an essential product for any business that operates a single vehicle, or fleet of vehicles. It provides protection for the business and its drivers in the event of an accident or other covered event. As an insurance agent, it's important to understand the different types of coverage included in commercial auto insurance policies so that you can provide the best possible coverage for your clients.