Guide to Understanding Your Business Auto Insurance Policy

Any business using vehicles in their normal operations need to have a commercial auto insurance policy. On top of having the correct policies in place, businesses need to assure they’re keeping track of and staying up to date on any changes in the policies.

This article explains what commercial car insurance is, how it works, things that affect coverage, and how SmartCompliance helps businesses keep track of their policies.

What is commercial auto insurance?

With commercial auto insurance, any vehicles a company owns as well as the employees who drive them have coverage. Apart from company-owned vehicles, any other vehicles used in business operations have coverage. This includes employees’ cars and rental cars used for business operations.

How does commercial auto insurance work?

Like with regular car insurance policies, commercial car insurance policies have several types of coverage under one policy.

Basic coverage includes liability, medical payment/personal injury, collision, comprehensive and uninsured/underinsured motorist coverage.

In addition to basic coverage, commercial car insurance offers coverage that standard car insurance policies do not.

Additional coverage includes:

• Coverage for trailers your company uses, but are owned by other companies.
• Payment for temporary rental vehicles when the company vehicle is out of service.
• Rental vehicles for employees or clients.
• Use of employee’s cars for job-related functions.

Things That Can Affect Required Coverage

There are three things businesses need to ask when purchasing a commercial auto insurance policy. We’ll explain each question below.

Who owns the vehicle?

When deciding whether or not to purchase commercial car insurance, it’s important to look at vehicle ownership. If the company owns the vehicle, it needs commercial auto insurance. On the other hand, if an employee owns the vehicle the type of coverage required varies.

When an employee owns a vehicle that could qualify for commercial car insurance, the determining factor for coverage is vehicle use.

What is the vehicle used for?

In most cases, if employees are only using vehicles to commute to and from the office, commercial car insurance is not needed. If the vehicle transports people, goods, or equipment for the company, commercial auto insurance is necessary.

What is the vehicle make and model?

Sometimes vehicles need coverage regardless of who uses them or what they’re used for. Trucks over 1,000 pounds or those with load capacities over 2,000 pounds and any vehicles with commercial modifications must have commercial coverage.

Keeping Track of Commercial Auto Policies with SmartCompliance

Maintaining employee and vehicle safety doesn’t end at purchasing commercial car insurance. To sustain safety, managers need to update and track these policies.

Using SmartCompliance to track commercial auto policies ensures all policy requirements are met. Sign up today for a free demo to see how you can ensure your vehicles and employees are covered by using SmartCompliance.