Commercial Auto Insurance: What It Is & When Your Clients Need It

Commercial Auto Insurance: What It Is & When Your Clients Need ItIf your clients are one of the millions of employees who use business fleets or drive their own vehicles for work, there’s a good chance they’re misusing their Commercial Auto Insurance policy. Personal auto insurance is straightforward, simple and often required by state law. However, when it comes to commercial auto insurance, there are some grey areas. In this post, we’ll cover the basics of this policy, including when to purchase it so that you can inform your commercial clients and provide them with outstanding comprehensive coverage.

What is commercial auto insurance?

Commercial vehicle insurance is a policy of physical damage and liability coverages for amounts, situations, and usage not covered by a personal auto policy. Knowing the difference between a personal auto insurance policy and a commercial auto policy is important business—for your business. This type of business insurance covers a variety of vehicles—from automobiles used for business, including company cars, to a wide variety of commercial trucks.

Who needs commercial auto insurance?

There are various scenarios where this policy should be carried, including:

  • When the vehicle is used strictly or primarily for business.
  • If the vehicle has commercial tags.
  • If employees use the vehicle for work.

Why do your clients need commercial auto insurance?

As an agent, you know that liability limits vary significantly for businesses. Personal auto insurance is not structured to cover the potential losses that a fleet could suffer. As such, this policy can be tailored to include necessary limits, named drivers and inclusions to adequately cover the business and its vehicles.

What does it cover?

According to the Department of Motor Vehicles, it includes all of the basic coverages a personal policy offers, including coverage for:

  • Employees, including fellow employee coverage and broadened and blanket policies that protect additional employees or people for whom your business is doing work.
  • Equipment, including loading and unloading goods.
  • Business, which protects your assets in the event of a lawsuit.

How much coverage is required?

This depends on the number of vehicles the business has and the preferences of your client. However, your client’s financial institution might require that they carry more comprehensive coverage if they are leasing the vehicles or making payments on them as an added security measure.

Some additional components to include in your client’s policies are:

  • Emergency roadside coverage – This includes battery, tire, towing, and locksmith services.
  • Medical payments – Medical costs add up quickly, especially if others are involved. This offers extended limits for your clients should they get into an accident.
  • Uninsured motorist – This component is critical for protecting your clients should they get into an accident with someone who is uninsured or doesn’t carry enough coverage.

About Mavon Insurance

At Mavon Insurance, we specialize in crafting custom-tailored solutions for personal, commercial, professional and national programs. Our comprehensive Cyber Liability coverage includes, but is not limited to, forensic analysis, website publishing, programming errors and omissions, breach notification and monitoring services, crisis management, extortion, and much more. For more information regarding our products and services, or to become an agent with us, contact our knowledgeable experts today at (877) 426-2866.