Commercial Auto Insurance: Why Your Business Needs Coverage

Running a business that relies on vehicles—whether a single work van or an entire fleet—comes with risks. Without proper coverage, an accident could lead to devastating financial losses. Commercial auto insurance safeguards your business from costly liabilities and helps keep operations running smoothly.

Commercial auto insurance is tailored to vehicles used for commercial reasons. In short, it is a contract between you and your insurance carrier that specifies how your insurer will reimburse you for financial losses from an accident, personal injuries, property damage or other specified item stated in the insurance policy.

Business vehicles may include cars used for business purposes, delivery vans, trucks, and more. Commercial auto insurance may cover a variety of vehicles, including tow trucks, reefers, hotshot trucks, flatbeds, and others.

Why Commercial Auto Insurance Matters

Many business owners mistakenly assume their personal auto insurance covers work-related driving. However, most personal policies explicitly exclude commercial use. If you or an employee gets into an accident while using a vehicle for work, you could be left paying out-of-pocket for repairs, medical bills, and legal fees.

Consider this scenario: A delivery company with multiple vans sends out a driver for a routine job. Unfortunately, the driver rear-ends another vehicle, causing injuries and significant damage. Without commercial auto insurance, the company faces thousands of dollars in medical expenses, legal claims, and repairs—all of which could have been covered by the right policy.

What Does Commercial Auto Insurance Cover?

A solid commercial auto insurance policy protects your business in various situations, covering costs related to accidents, injuries, and property damage. Here’s what it typically includes:

1. Liability Coverage

Bodily Injury: Pays for medical expenses and legal fees if you or an employee cause an accident that injures others.

Property Damage: Covers damages to another person’s property caused by your business vehicle.

Combined Single Limit (CSL): Provides a single coverage limit for bodily injury and property damage claims, rather than separate limits.

2. Protection for Your Business Vehicles

Collision Coverage: Pays for repairs or replacement if your vehicle is damaged in an accident.

Comprehensive Coverage: Covers theft, vandalism, fire, weather damage, and collisions with animals.

3. Coverage for your Drivers and Passengers

Personal Injury Protection (PIP): Covers medical expenses, lost wages, and other costs for you and your passengers, regardless of fault.

Uninsured / Underinsured Motorist coverage: Protects against damages caused by drivers who don’t have insurance or don’t have sufficient insurance to cover for bodily injury or property damage.

Who Needs Commercial Auto Insurance?

If your business relies on vehicles for work, you need commercial auto coverage. Here are some common situations where business auto policy is required:

• You own or lease vehicles in your company’s name.

• Employees drive company vehicles for work purposes.

• You use a personal vehicle for business, such as transporting goods, equipment, or clients.

• You operate food trucks, delivery vans, or service vehicles.

• Your work requires hauling heavy loads or hazardous materials.

How Commercial Auto Insurance Saves You Money

Commercial auto insurance is an investment, but it can prevent major financial losses. There are some ways businesses can keep premiums manageable:

1. Implement Fleet Safety Programs: Training employees on defensive driving can reduce accidents and claims.

2. Use Telematics: GPS tracking and driver monitoring tools can lead to lower premiums by improving safety and efficiency.

3. Bundle Policies: Combining your commercial auto insurance with general liability or workers’ compensation can save money.

4. Choose Higher Deductibles: Opting for a higher deductible lowers your monthly premium (just ensure you can cover the deductible if needed).

The Cost of Not Having Coverage

Still unsure if you need commercial auto insurance? Consider this: The average cost of a commercial vehicle accident claim is $45,000, with severe cases exceeding $1 million. A single uninsured accident could financially cripple a small business.

Don’t take that risk. Protect your company’s assets, employees, and future with the right coverage.

Get Covered with STAR Mutual Risk Retention Group

As STAR Mutual RRG, we specialize in commercial auto liability coverage across multiple states in the U.S. Whether you operate a small local business or manage a fleet of semi-trucks, our policies provide the protection you need to stay compliant and financially secure.