Business Automobile Insurance

Commercial Insurance

You Have a Lot Riding on Those Tires! Enjoy a Smooth Ride Knowing You Have the Right Coverages for Your Business Auto Needs

Business automobile insurance provides coverage whether you own or lease a private passenger vehicle or a fleet of trucks and trailers.  The coverage protects your business from liability, bodily injury or property damage caused by your vehicle to other people or property, and physical damage to your own vehicle.  A business auto policy may also cover your employees when they are operating their own vehicles in the course of your business.

So What’s Under the Hood of a Commercial Automobile Policy?

Covered Autos

Vehicles are identified that are described or identified according to nine symbols:
Symbol 1 – any “auto”
Symbol 2 – owned “autos” only
Symbol 3 – owned private passenger “autos” only
Symbol 4 – owned “autos” other than private passenger “autos”
Symbol 5 – owned “autos” subject to no-fault insurance
Symbol 6 – owned “autos” subject to compulsory uninsured motorists laws
Symbol 7 – specifically described “autos”
Symbol 8 – hired “autos” only
Symbol 9 – non-owned “autos” only

Compulsory Bodily Injury

Provides coverage limits of $20,000 per person/$40,000 per accident for anyone injured by your auto in an at-fault accident.   It does not cover you out-of-state or on private property, nor does it cover your passengers.

Personal Injury Protection (PIP)

This is no fault coverage.  PIP pays up to $8,000 for lost wages, medical, hospital and funeral expenses and replacement services.

Liability

Business auto liability insurance covers your financial responsibility if you or an employee is considered at fault in an accident, and people are injured or property is damaged.  Limits can be split per person and per accident, or on a combined single limit basis.  When an auto is damaged in a covered accident for which the insured is liable, the policy will pay not only for the repair of the damaged auto but also for a replacement vehicle while the auto is being repaired.  It also covers the judgment awarded (up to the limits of the policy) and the court cost and legal defense fees.

Medical Payments

Auto Medical Payments coverage is designed to pay reasonable and necessary medical and funeral expenses incurred by the insured and family members because of bodily injury caused by an auto accident.  This includes coverage for the named insured and any occupant in a covered vehicle, regardless of fault.  It also applies if the insured is struck as a pedestrian.  However, coverage does not apply to bodily injury to employees during the course of their employment, because such injury normally would be covered under workers compensation insurance.  Coverage will apply if the employee was injured while using the covered auto for pleasure purposes.  Many businesses do not purchase auto medical payments coverage for this reason, but if company autos are occupied by non-employees such as customers or other business guests, this is important coverage.

Uninsured Motorists

This coverage applies to an insured that is injured by an uninsured motorist or hit-and-run driver.  Bodily Injury Caused by an Uninsured Auto protects you, anyone you let drive your car, household members and passengers.  A minimum limit of $20,000 per person and $40,000 per accident is required.  This coverage does not pay for property damage or damage to your auto.

Underinsured Motorists

This optional coverage applies if you are injured by a motorist with liability limits less than the amount of the damages you are entitled to recover.  The other motorist’s policy pays its limits first and then your policy pays any remaining losses up to the amount purchased.  This coverage will not pay for damage to property.  This coverage protects the named insured and family members of individual named insured’s while occupying any auto and also applies to other occupants of a covered auto.

Comprehensive Coverage

Comprehensive coverage applies to loss of or damage to a covered auto, less any deductible, resulting from anything other than a collision or upset (events such as fire, theft, vandalism and glass loss). Personal property such as a stereo is not covered unless it is permanently installed in your car.  If your vehicle is leased or financed, your lender may require this coverage.

Collision Coverage

Collision coverage applies to damage to a covered auto, less any deductible, resulting from the impact with another vehicle or object, regardless of fault.  Personal property is not covered unless it is permanently installed in your car.  If your vehicle is leased or financed, your lender may require collision coverage.  For an additional premium, you may purchase a “waiver of deductible,” which means that your collision deductible will not apply when an accident is caused by an identifiable driver.

Loss of Use/Rental Reimbursement

This coverage can be purchased for scheduled vehicles, and applies in the event of loss to a covered auto for expenses incurred for the rental, not including any mileage or gasoline charges, of a substitute auto of equivalent type and purpose, including taxicabs, buses and other means of transportation.  The endorsement requires a maximum dollar amount per day, maximum number of days, and maximum amount for any one period to be shown.  This coverage will not apply if the insured has spare or reserve autos available to it.

Towing & Labor

Will pay up to the limit shown on the declarations for towing and labor costs incurred each time a covered “auto” of the private passenger type is disabled.  However, the labor must be performed at the place of disablement.

Optional Coverages

Drive Other Car Coverage

This endorsement provides coverage for executives and employees named on the endorsement and his or her spouse who is supplied a company vehicle, but who does not own a personal vehicle or have personal automobile coverage. An endorsement may be added to the policy of the company that furnishes the automobile, giving protection while the named individual or a member of his family is driving a car borrowed or hired from a third party (other than the vehicle named in the policy).

Hired and Non-Owned Auto Liability Coverage

Unless company employees use public transportation for all business needs, hired and non-owned insurance is an important coverage that should be part of your business auto insurance program.  Ordinarily this coverage only provides liability protection for rental situations and errands, but sometimes physical damage insurance is available.  A company does not have to own any vehicles to obtain hired and non-owned coverage.  In this case, coverage can be added to the general liability policy.  Examples of situations involving the use of non-owned vehicles for business purposes include asking an employee to pick up breakfast for a meeting, sending a sales representative to visit a client, or having a friend mail a package on her way to the post office.

Auto Loan/Lease Gap Coverage

This endorsement provides coverage to pay any outstanding indebtedness incurred by an insured in the event of a total loss to a motor vehicle that has been financed and the amount due under the financial agreement is greater than the ACV of the vehicle.

Loss of Use Expenses

This endorsement gives the insured and insurer a choice of limits that may apply to loss of use expenses.

Dealer Physical Damage/Lot Coverage

This part of the policy provides physical damage coverage to vehicles owned, hired, or held for sale by the insured.  The insurer will pay for direct and accidental loss or damage to a covered auto or its equipment under comprehensive, specified causes of loss or collision coverage.  The coverage can apply to the following:  (1) autos the named insured owns outright (its service vehicles); (2) the named insured’s interest in vehicles that are financed (an auto dealer’s interest in vehicles it is holding for sale); or (3) the named insured’s and any creditor’s interest in vehicles that are financed (the dealer’s and creditors’ interests in vehicles the dealer is holding for sale).  Coverage also may apply to all interests in any auto (not owned by the named insured or any creditor) while it is in the named insured’s possession on consignment for sale.  When physical damage coverage applies for hired autos, the policy provides that these autos will be covered autos.  There are three types of physical damage insurance available.

Garagekeepers Liability

The garage policy provides coverage for auto dealers (sell, service, and repair new or used private passenger autos, trucks, truck-tractors, motorcycles, recreational vehicles, and other self-propelled land motor vehicles).  The exposures and insurance needs of these businesses are distinctive in that the auto liability and general liability coverage needs tend to converge.  The garage policy combines coverage for liability exposures arising from the insured’s premises, operations, products, completed operations, independent contractors, contracts, and its ownership, maintenance, or use of autos into one form.  The garage may be legally liable for loss to its customers’ autos while they are left in the garage’s care.  Garage liability insurance precludes coverage for property damage to property in the insured’s care, custody or control.

Truckers Coverage

Motor carriers subject to regulation under the Motor Carrier Act of 1980 are required to provide evidence of a minimum level of financial responsibility (between $750,000 and $5 million) based on the commodities they carry.  This endorsement (MCS–90), which must be issued in the exact name of the motor carrier (as shown on its operating permit) subject to the Act, amends the auto liability policy to comply with requirements of the Act.  The endorsement applies to carriers of hazardous substances whether or not they operate in interstate commerce.  Also, it applies to motor carriers that operate for hire and/or carry their own commodities.  The endorsement applies to all motor vehicles of the insured that are subject to the regulations whether the vehicle is specifically listed on the policy or not.  Motor carriers are held responsible for “public liability” resulting from negligence in the operation, maintenance, or use of motor vehicles subject to the financial responsibility requirements of the pertinent sections of the Motor Carrier Act.  Public liability is defined as liability for bodily injury, property damage and environmental restoration (restitution for loss, damage, or destruction of natural resources, and cleanup costs, caused by a pollution incident during the course of the motor carrier’s transportation of the pollutant. 

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