Commercial Auto Insurance for Contractors: An Overview

When your business depends on a company car, truck, or fleet, you need commercial auto insurance. It’s required in states across the U.S., plus you need sufficient coverage if one of your workers gets involved in an accident. Here’s a look at commercial auto insurance benefits for contractors.

What Commercial Auto Insurance Covers?

Some of the main commercial auto insurance benefits for contractors involve avoiding heavy lawsuits if one of your drivers causes damage to someone’s personal property. As long as you have enough liability coverage in place, your company won’t have to dig into its profits to pay for someone’s medical bills. A standard commercial auto policy for contractors usually covers repairs for your company’s vehicles or damage caused to a third party’s vehicle.

When an employee gets into an accident on the job in their own personal vehicle, a commercial auto policy won’t cover it. That’s why you need to weigh the pros and cons of letting employees drive their own cars for work-related activities.

Different Types of Auto Coverage

  • Liability coverage – Your business needs to meet the minimum auto insurance requirements for your state, which usually equates to liability and property damage up to specified coverage limits. Liability coverage pays for medical bills related to bodily injury from a collision.
  • Property damage coverage – You need to carry property damage coverage so that if one of your drivers crashes into someone’s driveway, your business will be covered. Without this coverage, your firm can be sued for thousands of dollars.
  • Uninsured/Underinsured coverage – If your driver is involved in an accident with an uninsured motorist who is at fault, you can have your uninsured coverage pay for it. The coverage also pays for hit-and-run accidents.
  • Comprehensive coverage – This coverage pays for non-collision damage, such as if a tree branch falls on your vehicle. It also covers losses that are beyond a company’s control, such as theft or vandalism.

Determining the Right Coverage

When reviewing commercial auto insurance benefits for contractors with your insurer, ask about what types of add-ons you may need for your specific business. If you run a courier service, for example, it may involve round-the-clock activity on a daily basis. This type of business needs much higher coverage limits than a company that sends an employee out on occasional errands.

During the pandemic, many new companies offered delivery services while supermarkets began experimenting with their own delivery services. Demand for independent delivery services has grown to avoid slowdowns in the traditional postal service. The more a transportation business promotes speedy delivery, the more coverage does it need.

Coverage limits matter because if a driver gets into an accident that causes damage to multiple vehicles, the damage may exceed coverage limits, resulting in lawsuits.

A company with a fleet of trucks that haul heavy equipment poses risks of causing massive damage, which requires more extensive coverage. Even if your business owns no vehicles but rents or leases them, your company will still need to carry appropriate commercial auto insurance.

You can get a break on commercial auto insurance rates if you own a large fleet. Another way to reduce monthly costs is to bundle different types of business insurance together under one policy.

All businesses that have employees who drive company vehicles must carry commercial auto insurance: the bigger the fleet, the more coverage you need. Our agents at Artisan Insurance Solutions will work with you to find the right solutions for your coverage needs. Contact us today to get started!

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