What Does a Commercial Auto Insurance Policy Cover?

If your business operates vehicles, whether it’s a single company car or an entire fleet of delivery trucks, commercial auto insurance can help you handle the financial consequences of unforeseen incidents. Since personal auto policies do not typically cover vehicles used for business purposes, securing adequate commercial coverage is crucial for business owners.

Liability Coverage

This coverage can help pay for bodily injury or property damage you or your drivers may cause to others in an accident. In Alabama, minimum liability limits are required by law, but many businesses choose higher limits for added financial protection.

Physical Damage Coverage

With this coverage, businesses may receive financial support to repair or replace company-owned vehicles when damaged. It typically includes:

• Collision coverage may apply to damage resulting from an accident involving other vehicles, buildings or other stationary objects, regardless of fault.
• Comprehensive coverage may address noncollision events such as theft, vandalism, fire, animal-related incidents and severe weather.

Uninsured/Underinsured Motorist Coverage

If your business vehicle is involved in an accident and the at-fault driver does not have adequate insurance, this coverage can help pay for your damages.

Additional Coverage Options

Depending on your needs, you may also consider:

• Hired and non-owned auto coverage for vehicles your business uses but doesn’t own
• Roadside assistance for breakdowns
• Rental reimbursement for temporary vehicle replacement

What Policies May Not Cover

While commercial auto insurance provides broad financial protection for your business vehicles, it doesn’t cover every situation. Being aware of the following exclusions can help you avoid unexpected gaps in your coverage:

• Personal use of vehicles
• Cargo and business property
• Intentional acts
• Wear and tear or mechanical breakdown
• Racing or off-road use
• Vehicles and drivers not listed on the policy

Get the Right Coverage for Your Business

Every business has different vehicles, drivers and risks. Contact Bama Insurance Services today to review your options and find coverage that fits how your business operates.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.