If you drive a business vehicle, you probably must carry commercial auto insurance. Your company's delivery vans are often among the vehicles that need this coverage. However, what about the cargo that you might carry inside them? Will commercial auto insurance cover these items if they sustain damage?
In many cases, you will find that you have cargo coverage options alongside your commercial auto insurance. However, it is important to understand the correct way to augment your policy to include your cargo coverage. Simply assuming that all policies offer protection is not correct.
Commercial Auto Insurance Elements
Driving a vehicle for business usually excludes that vehicle from coverage offered by standard, personal car insurance. Even if you have a personal policy, driving your car in the regular course of business (besides commuting to and from work) might mean that policy becomes void during that time. It is only a commercial auto policy that might be able to assist you during times of business driving.
A commercial auto insurance policy will contain several types of coverage that look like regular car insurance coverage. Usually, it can include:
- Liability Insurance
- Collision Coverage
- Comprehensive Coverage
- Uninsured/Underinsured Motorist Coverage
- Rental Car Coverage
- Roadside Assistance
These coverage elements will come with specially-tailored policy limits and terms. This will help address the specific financial and operating risks that accompany business vehicles, as opposed to private cars. Furthermore, policies can also usually offer additional coverage that will apply to niche risks.
You might not worry about how your personal car insurance might apply to cargo or possessions carried within the vehicle. However, to a business, this factor is often important. Will your commercial auto policy extend to this type of loss?
Let's say you carry your own business equipment within a commercial vehicle. Or, you deliver items to your clients. Should a wreck occur, these items might get damaged. You might suffer a financial loss yourself. Or, your delivery clients might even want compensation for their damaged or lost items.
To avoid putting yourself in an untenable position, you might want to see if your commercial auto policy can help cover your losses. Often, this is a possibility from which you might benefit, provided you carry the appropriate protection.
Expanding Your Protection With Inland Marine Insurance
By itself, a commercial auto insurance policy often will not include coverage for the van's cargo.
If accident damages that cargo, you might have to apply for an additional type of insurance, called Inland Marine Insurance. In many cases, you must purchase this coverage separate from a commercial auto policy, though the two policies work very closely together in the event accidents occur.
Inland marine coverage offers specific insurance to items carried within your business vehicles. It gets its name because the policy was developed at a time when river transportation was the main form of shipping in the United States. However, nowadays, it covers cargo transported by road as well. It can help you in a couple of different ways.
First, this policy might assist your business itself. When you need to transport critical equipment — particularly that of high value — coverage can help you replace items damaged in a wreck. While you might think your standard business property insurance might cover these losses, those coverage options often will not provide enough protection. That's why inland marine insurance can usually provide better coverage.
Furthermore, an inland marine policy can often cover the belongings of others carried within a commercial vehicle. For example, if a wreck damages a customer's refrigerator that you had in your care during transportation for repairs, the inland marine policy can often cover this item. Therefore, you will have a resource available to help you compensate the client for their personal losses in these cases.
Will I Have To Pay For All Cargo Damage?
Whether you must file a claim on your own commercial auto or inland marine coverage will depend on a variety of factors.
For example, if you are not found at-fault for the damage to someone else's cargo (such as if another driver is deemed at-fault for the wreck and damage) then you might have no obligation to assist the person with their losses. However, a client might still attempt to request compensation for the lost cargo from the business. Therefore, you should always be prepared to provide your commercial auto liability and inland marine insurance liability coverage to those who request it. The client can then contact your insurer, and the insurer can tell them if they have coverage available.