Small business owners operate on limited budgets. They have to determine which items serve as necessities and which are optional. Commercial auto insurance must fall under the essential category, as one incident could put the owner out of business. What does a commercial auto insurance policy cover, and why do businesses of any size need it? 

Who Needs Commercial Auto Insurance?

With insurance for commercial vehicles, a person might assume they don’t need this coverage, as they only work part time or they function as an independent contractor. However, anyone who uses their vehicle for work requires this coverage. A commercial policy differs from a personal policy, although some insurers incorporate multiple policies in one bundle.

What Does the Policy Cover?

Accidents happen, regardless of how careful a driver is. If an accident occurs, the small business doesn’t need to pay for the damage. The policy takes care of any expenses, up to the maximum amount allowed under the policy. What types of coverage might a business owner get? 

Collision Coverage 

Accidents related to the weather and those involving another vehicle or a fixed object fall under the collision coverage portion of the policy. The owner of the business only pays for any deductible. Many owners combine this coverage with comprehensive coverage. 

Comprehensive Coverage 

Comprehensive coverage comes into play when the vehicle is stolen, vandalized, or otherwise damaged outside of a collision. Falling trees, floods, and fire serve as other examples of when the insurance company might cover a damaged vehicle. 

Medical Coverage

Medical bills quickly add up following an automobile accident. Business owners protect themselves from being held responsible for these bills by investing in medical coverage through the insurer. A commercial auto insurance policy covers the employer, employees on the job, and any passengers injured in the accident. No matter who is at fault for the collision, the policy pays out. The business owner receives peace of mind, knowing they are doing everything possible to keep employees and themselves safe when the job takes them out on the road. 

Uninsured Motorist Coverage

Although it would be nice if everyone had insurance, some drivers on the road don’t maintain a policy. With this coverage in place, the business owner feels confident that anyone injured in an accident with an uninsured driver or in a hit-and-run collision will have their medical bills paid and possibly their property damage. The policy may also pay if a driver responsible for a collision lacks the coverage to handle all expenses. 

Why This Coverage is Necessary

Every business owner needs to invest in commercial auto insurance, regardless of the size of the organization. This includes individuals who are self-employed and those who work as independent contractors. No person wants to see their hard work go to waste because someone sued them for an auto accident. This coverage ensures the business remains protected financially, and rates are often less than what a business owner imagines

Nobody knows what will happen when they go out on the road. A person cannot control the actions of others when driving, which means careful drivers may be involved in accidents just as reckless drivers are. Know that you and your employees remain protected whenever you get behind the wheel with the help of smart fleet systems. This is one type of coverage you should never be without.