There are 6 million car accidents on average in America every year. This translates to over 16,438 accidents per day.
Many companies that own or lease commercial vehicles will invariably fall under these statistics and experience a type of accident. Regardless of whether they will be at fault or not, they will suffer loss.
For companies, commercial car insurance is a critical part of risk management. Here are the reasons why your fleet needs commercial auto insurance coverage.
It Helps Protect Equipment
Many businesses tend to carry their equipment with them as they move from place to place. Catering companies, for example, take their equipment to and from an event. Drilling firms tag their equipment along to a site.
In the course of regular business, these companies expose themselves to risk in the event of an accident. If the equipment on board ends up being damaged in an accident, commercial vehicle insurance will help pay for its replacement.
Note that unattached tools will not be compensated for by the provider.
It Might Be a Requirement in Your Lease
For some companies, leasing their commercial vehicles is cheaper than outright purchase. As a part of the lease terms, the lessee might require that your business maintain a commercial auto policy.
In the event of any damage, the policy will protect not just you but also them. It will help the lessee not bear full responsibility for repairing the damage or replacing any written off vehicle.
It Protects Your Goods from Loading and Unloading Damage
If your business transports goods to clients, it exposes itself to potential risk anytime the products are being loaded or unloaded.
Should any damage occur to the goods while they are being loaded or unloaded the business car insurance policy will reimburse you for that loss.
It Provides Continuity
When the car that your business relies on for operations gets damaged or written off, it can disrupt your workflow.
Any such disruption translates to a hit on your productivity and profitability, and for some firms, it can be the difference between survival and closing down.
If you have a business auto insurance policy, it will help meet the costs of using a temporary rental car to keep your operations going.
It Helps You Get Higher Limits
Every time your company car leaves the parking lot for business duties, it risks being involved in an accident. Such accidents might even result in personal injury lawsuits.
When you are fighting a lawsuit you have to foot the attorney’s fees, any medical expenses that may arise, and punitive damages too should you be at fault. These costs can spiral out of control.
If your firm, as part of a cost-cutting measure, was only relying on personal auto insurance coverage you may have to spend significantly out-of-pocket.
Commercial auto insurance provides you with higher insurance limits that cover all your firm’s vehicles. In case of any liability or damage, you will pay less out-of-pocket, if at all.
It Reduces Punitive Damages to Property
When an accident occurs, your company vehicle might damage someone’s property. If, after an investigation is carried out, your business is found to be at fault you will have to pay for the damages.
These costs can grow into six or even seven figures. Such huge, unexpected amounts might put your firm under financial duress or even cause it to go under.
With commercial auto insurance, your business will be able to pay off the punitive damages without drastically denting its bank account. Some policies will even pay for your defense costs if it is covered under the plan.
It Protects Your Employees and Customers
As a business owner, you will not always be there to do all the tasks. At times your employees will need to use the company vehicle for work purposes. But you cannot always be assured that they will act in the firm’s best interests.
A staff member might get behind the wheel while intoxicated and end up in an accident that leads to bodily injury or even death. As a result, your firm will be at fault.
A commercial auto policy covers such an eventuality. It will help you foot the damages. Additionally, it will also take care of your legal costs when you hire a defense lawyer.
What Is Covered Under a Commercial Car Insurance Policy?
A commercial auto insurance policy covers the same things a personal auto policy does. The difference between the two plans arises due to the differentiated use of exclusions, limits, eligibility, and definitions involved.
The following are some things it covers.
Bodily Injury Liability
This coverage pays for any bodily injury or death that might occur and for which you are at fault. Vehicular manslaughter is a serious offense especially if you were intoxicated at the time of the accident.
If found guilty you can be fined up to $10,000. You can learn more about how to protect your firm in case of a fatality here.
Bodily injury liability also covers your legal defense fees in many cases.
Property Damage Liability
This protects you when your company vehicle accidentally damages property belonging to another person or entity. Coverage for legal defense fees is also included in this policy on many occasions.
Uninsured Motorist Coverage
This coverage pays for injuries you suffer due to a hit-and-run or uninsured driver. In some cases, this can also apply to when there is damage to your property.
This pays for the damage to your car when another object hits it. It also extends to when your vehicle hits another object.
No-Fault or Personal Injury and Medical Payments Coverage
It will pay for the expenses incurred when seeking medical attention for the passengers in your vehicle and the driver arising from a covered accident. It does not depend on who the party at-fault is.
Take up the Benefits
A company’s commercial fleet is subject to many unforeseen risks throughout the year. It is essential that your business adopts auto insurance as a way to mitigate these risks.
Commercial car insurance is not the only insurance that a business should have. This article details the most important types of insurance you must have.