Understanding Business Auto Insurance

Understanding Business Auto Insurance

Insurance is important for companies and business auto insurance is just one type of coverage. This type of insurance protects you and the company in any situation involving a vehicle. There are several types of coverage with some being optional and others being mandatory. These are the primary types of business auto insurance available.

Auto Liability Coverage

This type of coverage is used when an employee is at fault in an accident when driving a business vehicle or for a business purpose. Both the individual and the company can be responsible for injury or damage. It’s required by law to have both bodily injury and property damage liability.

As the name suggests, bodily injury liability protects the business from paying medical bills, loss of income, or funeral expenses of the people who are involved in an accident. Property damage helps to protect a business from the cost of repairing or replacing another driver’s car.

Uninsured Motorist Coverage

Many drivers do not have coverage or have inadequate insurance coverage. If one of them is involved in a crash with an employee on a business-related trip, this coverage is beneficial. This type of coverage also has two parts for bodily injury and property damage.

Medical Payments Coverage

If an employee is in an accident, regardless of fault, paying for medical care can be costly. Medical payments insurance can help to pay for the medical costs or, if needed, funeral expenses if anyone in the crash is injured or killed. It may as well cover additional expenses such as a loss of wages when an employee is recovering from an accident.

Collision Coverage and Comprehensive Coverage

If the business-related vehicle is damaged in an accident, business auto insurance works to pay for repairs or replacement to allow businesses to get back to work. There are two types of this coverage.

Collision coverage will cover damage to a vehicle if the driver collides with another vehicle or a stationary object such as a bridge, building, or tree. If someone else hits a parked car, this is also considered a collision. Comprehensive coverage pays for damages to a vehicle caused by something other than collisions such as theft, vandalism, animal-related accidents, and fires.

Additional Coverage

Businesses may also want to purchase additional coverage as a part of their auto insurance packages. Coverages vary and can include towing and labor costs for stranded cars. Rental reimbursement coverage can be used for renting a car during repairs. Non-owned auto liability coverage protects a business from injury caused by an employee while driving their own vehicle for a business purpose.

Final words

Depending on the size as well as the needs of the business, having an auto insurance policy can be a great way to ensure adequate coverage. While all businesses that require travel by car should have a business auto insurance policy, coverage needs may vary. Choose higher coverage for everyday driving as costs from even a single accident can be extensive. Reviewing auto insurance needs is an important task that all businesses should do, for both liability and legal reasons.

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