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We all know that having any kind of vehicle is a costly endeavor, more so if you’re a thriving business. In addition to this, the larger your business becomes, the more maintenance costs you will incur.
What would happen if, on top of those expenses, one of your drivers got involved in a vehicular accident? The financial cost would be significant, certainly enough to put a dent in your bottom line.
It’s a good thing that commercial auto insurance exists—a form of financial protection that specifically covers the costs of anything related to your business vehicles.
In this article, we’re going to talk all about commercial vehicle insurance and what you need to know when getting one for your business.
What is Commercial Auto Insurance?
If your business utilizes plenty of vehicles, getting commercial car insurance is basically a must.
This type of insurance policy helps cover the financial cost of any vehicle-related incidents during your business operations. It doesn’t matter if your company uses trucks, vans, or regular cars—commercial auto insurance will serve as your safety net if the driver gets injured, or the vehicles need replacement or repair. You’ll be sending off your employees with peace of mind, knowing that you’re covered in case of emergencies.
If you regularly deal with vehicles, getting commercial auto insurance with Magnum Insurance can help you breathe easier.
Commercial Auto Insurance vs. Personal Auto Insurance
There are plenty of similarities between commercial and personal auto insurance. After all, they both insure against the financial burden of incidents affecting vehicles.
However, these two types of auto insurance have multiple differences, as well. Specifically, commercial auto insurance will differ in terms of ownership, scope, and coverage limit.
Ownership
One crucial aspect differentiating personal and commercial auto insurance is the ownership of the vehicle. Now, you might think this is a no-brainer, but some nuances do come into play.
For instance, many small business owners think that personal auto insurance is enough if they’re using their own vehicle in their business.
However, if an accident happens while another employee is using the said vehicle, the personal auto insurance policy won’t be able to cover them. Instead, the business owner would have to shoulder all the expenses and damages themselves. Depending on the severity of the accident, they may have to pay hundreds and thousands of dollars for both the employee and the vehicle itself.
In addition to this, some providers may even refuse claims if the accident in question happened while the insured personal vehicle is being used for business purposes.
Scope
Commercial auto insurance policies insure a wider variety of people, situations, and vehicles compared to personal auto insurance policies.
Many vehicles used solely for business purposes cannot be insured under a personal auto insurance policy, even if the owner is a sole proprietor.
Plus, as mentioned above, personal auto insurance typically only covers the owner of the vehicle. Commercial auto insurance, on the other hand, will let you add all your employees so that you can be covered regardless of who’s driving the vehicle at the time of the incident.
Coverage Limit
Commercial insurance has higher coverage limits than personal insurance. This is because commercial vehicles, on average, typically cost more to use than personal vehicles.
After all, businesses face more vehicular risks in their day-to-day operations, making them particularly prone to bigger and more expensive accidents.
Do I Need Commercial Auto Insurance?
If you’re a sole proprietor who uses a third-party delivery service and don’t usually use your personal vehicle for business purposes, getting commercial auto insurance may not be as practical for you.
However, if you’re a small to medium-sized business that regularly uses business-owned vehicles for delivery, transport, and general daily operations, this type of policy is a must.
Magnum Insurance recommends that services under the following categories avail this type of policy:
- Pickup and delivery services
- Logistics businesses
- Repair and in-house services
- HVAC, plumbing, and electrical professionals
- Caterers
- Builders and contractors
- Landscapers and plowing companies
Whatever your business is, Magnum Insurance will help you create a commercial auto insurance policy that is tailor-fit for your unique needs.
What Does Commercial Auto Insurance Cover?
If you’re a business, there are strict minimum coverages for your policy which vary depending on the state and your business industry.
However, at the minimum, you should ensure that your policy provider includes the following coverages:
- Comprehensive insurance. A ‘bundle’ of other coverages, including theft, fire, vandalism, collision, etc.
- Liability insurance. Covers the cost of an incident in which the driver of your vehicle was at fault.
- Uninsured or underinsured motorist insurance. Covers the cost of collision or incident should the other party not have sufficient coverage to pay for their liabilities.
How Much Does Commercial Auto Insurance Cost?
Commercial auto insurance typically costs more than personal auto insurance, mainly due to its bigger scope.
That said, unlike personal auto insurance, commercial auto insurance has wildly different levels of coverages and inclusions, as these types of policies are specifically made for the unique needs of various businesses. As such, it’s difficult to get an accurate figure down.
However, to answer your question of how much is commercial auto insurance: for policies with a $1 million limit, businesses pay a median price of $1,704.00 annually.
This is just a median, though, and the real price depends on your specific business. Here at Magnum Insurance, we’ll help you find the best policy at a price that works for you.
Getting Commercial Auto Insurance With Magnum Insurance
If you use vehicles every day for business purposes, a commercial auto insurance policy is absolutely crucial: both for your finances and peace of mind.
Now that you know everything you need to choose your policy, just give us a call here at Magnum Insurance and we’ll make sure that you get your commercial auto insurance policy in a much smoother and easier way.
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