Businesses that own vehicles and operate them as part of their duties need commercial auto insurance. This is not the same coverage as standard car insurance. Rather, it blends the separate industries of business and car insurance in ways that protects business drivers. Among the policy options you will likely have to carry is liability insurance. However, you might wonder how much you need? You might have to buy minimum levels of coverage, but often, you need more coverage than just what the law requires. Here's a little more information on how you should adjust your coverage.
Commercial Auto Insurance
Any business that owns a single vehicle or fleet of vehicles likely needs commercial auto insurance.
This coverage is in many ways similar to a standard car insurance policy. It will help the insured party afford the costs of recovery that might arise following wrecks, vehicle damage or other accidents. Where this coverage differs is that it will address the particular operating risks encountered by businesses, rather than private drivers.
If a business vehicle were to crash, then it could cause problems not only for the driver, but also for their business itself. Therefore, by carrying commercial auto coverage, the business' financial recovery might be better assured. You won't have to worry whether you might lose a critical financial investment in case problems occur.
Understanding Commercial Auto Liability Insurance
Commercial auto policies will usually pay for the damage to a company vehicle and related monetary losses. However, like nearly every other type of car insurance, this policy will also include auto liability insurance coverage. Liability coverage will not pay for vehicle damage or business property damage. Rather, it will pay for the damage a driver causes to others.
Nearly all states require commercial and private drivers to carry liability coverage. If the policyholder (the business or an employee driver) is found responsible (at-fault) for a wreck, then others impacted by the wreck usually have a right to file a claim against the at-fault party's coverage.
In other words, if an accident is your fault, then you might have to repay others harmed by your mistakes. This coverage can help you do so.
Available Policy Options
Auto liability insurance (both commercial and private) usually contains three types of coverage:
- Bodily Injury Coverage: Injuries that third parties sustain in wrecks might get very costly, even if they have health insurance. This coverage can help those parties pay for their medical costs. So, for example, if a business vehicle strikes a pedestrian, then the injured pedestrian can use this coverage to pay for their losses.
- Property Damage Coverage: A driver might strike another object. This might include both stationary objects — such as fences or buildings — and other vehicles. This coverage can help you compensate the owner of these items for their property damage. So, if you side-swipe another car, your property damage liability insurance can help you pay for that vehicle's damage.
- Legal Assistance: Sometimes, liability claims could lead to lawsuits. If they do, this coverage can help business owners pay for the costs of legal representation, as well as certain settlements.
Increasing Your Coverage
Missouri requires most drivers to carry certain levels of liability insurance, regardless of whether they are personal or commercial drivers. The state's minimum levels are:
- $25,000 bodily injury liability coverage per person
- $50,000 bodily injury liability coverage per accident
- $10,000 property damage liability insurance
However, it is highly recommended that all commercial drivers carry higher liability insurance limits.
Still, you might wonder, Why do I need higher liability policy limits?
Let's say that one of your business' commercial drivers is at-fault for a pile-up car accident. Several vehicles might sustain damage, and numerous drivers could sustain injuries. The resulting recovery costs, therefore, could skyrocket. You might have to compensate multiple parties for their losses.
Keeping the above example in mind, Missouri's minimum liability insurance often won't pay enough to cover the repair costs of damage to multiple cars. That's why, by carrying higher liability insurance limits, you will have more coverage available to assist you in cases of exceptionally costly at-fault losses. In many cases, you can achieve well over $100,000 in coverage for each element of bodily injury and property damage liability insurance.
Not only that, a commercial auto policy can include other liability assistance which comes better-tailored to commercial driving risks. For example, you might need non-owned auto liability insurance. With this coverage, you can pay for the mistakes of employees who drive their personal vehicles on business. It will help the business itself cover the at-fault losses related to such damages.
Talk to your Auto Insurance Discounters agent about your business' commercial auto liability insurance needs. We're happy to help you tailor and increase your coverage to your direct benefit. You can therefore have more assistance available in the event accidents occur.