What commercial auto insurance covers

Pays injury and property damage the business is legally liable for arising from the ownership, maintenance or use of a covered auto, and defends the suit. Commercial policies usually carry a single combined limit per accident rather than the split limits common on personal policies. Contracts, and the federal and state rules for certain trucking and passenger operations, set floors for the vehicle type; contracts with general contractors and municipalities often require a limit well above what the vehicle alone would suggest, and a commercial umbrella sits above this limit for accounts that need more.

Collision repairs or replaces a covered vehicle after impact with another vehicle or object; comprehensive covers theft, fire, vandalism, hail, glass, flood and animal strikes. Each is bought per vehicle with its own deductible, so an older truck can carry liability only while the new one carries both. Vehicles are valued at actual cash value unless a stated amount is scheduled, and permanently attached equipment such as a lift gate, a rack or a service body is covered only if it is included in the value.

Hired auto covers vehicles the business rents or borrows; non-owned auto covers vehicles the business does not own, chiefly employees' personal cars used for errands, deliveries and client visits. When an employee causes a crash in their own car on company business, the injured party sues the business, and this coverage is what answers. It is inexpensive, it is missing from a great many small-business policies, and it is the first gap we look for on a company whose staff drive their own cars.

Uninsured and underinsured motorist pays your driver's and passengers' injuries when the at-fault driver has no insurance or too little; the states differ on whether it can be rejected and on the limits offered. Medical payments pays occupants' medical bills regardless of fault. Utah adds personal injury protection under its no-fault system. For a business whose employees are covered by workers' compensation for on-the-job injuries these coverages matter less; for an owner-driver with no compensation policy they matter more.

The auto policy does not cover what the vehicle carries. Tools, materials and equipment need an inland marine or contractor's equipment floater; goods hauled for others need motor truck cargo coverage. Rental reimbursement, towing, and a downtime endorsement that pays lost income while a revenue-producing vehicle is repaired are bought separately, as is an endorsement covering employees as insureds when driving a company vehicle for personal use.