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What to Consider for Commercial Vehicle Coverage

Auto insurance is a no-brainer for many – or at least it should be. Auto insurance is one of those required insurances that nearly every member of the driving population has purchased at one point or another.

Something a bit less likely are those who have gone through purchasing insurance for commercial vehicles. To put it not-so-mildly, commercial auto insurances is like personal vehicle insurance on steroids.

As a business owner you probably already insure your personal vehicle, and various other assets and medical bills need to be covered in the event of an accident. But, with commercial auto insurance, you have to be more diligent—your business could potentially suffer more financial harm. There are all kinds of other things to take into account.

Here are some things to consider when purchasing commercial auto insurance:

The Vehicle Represents the Business

Commercial vehicles are physical representations of your business on the road. If you’re in an accident with that vehicle, other drivers may try to take advantage of the business.

This means that your commercial vehicles need more coverage than personal vehicles. The other person’s first thought may be that XYZ Construction most likely has a lot of money, so maybe they can sue you for lots of money. They may think that your business can pay out a great deal more than a personal auto policy can.

Because of this unfortunate reality, coverage for your commercial vehicles needs to be able to withstand a higher liability claim. Without the proper insurance coverage, your business could take a major hit—one that may not be easy to rebound from.

While having your company’s logo or brand on your vehicle is great for marketing your business, it can prove to be a major detriment. If you or an employee are involved in an accident, that logo can mean major dollar signs in someone else’s eyes. That is why it is even more important to have proper coverage protection!

Commercial vehicles should have a minimum combined $1 million single limit that can be used for any claim, however it is needed. This ensures that damage to property, personal injury, and vehicle replacement can all be sufficiently covered.

Commercial Vehicles Need More Coverage

Beyond the liability need, commercial vehicles are typically bigger than your standard personal vehicle. If you are a contractor, hauling equipment, tools, and supplies, you may have larger vehicles at your disposal that would cost more to replace. Not only would the vehicle need to be replaced, but the potential loss of whatever equipment is on board would need to be replaced as well.

Commercial vehicles also typically operate in fleets, as opposed to a single vehicle. With a company owning a fleet of vehicles, each one needs to be listed on the policy, each with adequate coverage. The loss of one vehicle can cause big problems if each vehicle isn’t covered properly.

More Drivers Need Listed

Your personal vehicle may have a few different drivers—yourself, a spouse, and perhaps a teen driver. However it is not likely that 20 different people will be using the vehicle at any given time.

This is not the case with commercial vehicles. For many companies, upwards of 20 to 30 people could be using or operating a vehicle in your fleet. Multiple trucks on the road means multiple drivers, and unfortunately that can mean multiple chances for accidents. Not only will each vehicle need to be listed on your policy, but each driver as well.

The potential for more passengers per vehicle is higher with commercial vehicles, as well. If many employees are packed into a truck, heading to the jobsite, there is higher risk of bodily injury in the event of an accident, meaning more personal injury coverage required.

Vehicles You Don’t Own

This aspect of commercial auto coverage may seem strange. How could you be liable for an accident caused by a vehicle you don’t even own? But if you hire someone to haul materials for you and they get into an accident, you are going to be vicariously liable for the damages they caused. All because they were doing work in the scope of your business.

This is where hired and non-owned auto liability coverage comes in handy. This type of coverage is only available on commercial auto policies. A non-owned vehicle is any vehicle you do not own that is being driven for your business—including rental cars! Hired vehicles, however, are those vehicles you hire to do work for you, such as hauling materials. Any of these types of vehicles can leave you vulnerable for a liability claim.

Hired and non-owned liability coverage is also useful if you have employees who use their personal car for work. Having this coverage on your policy would provide liability coverage if your business is sued following an accident. Thankfully, the employee’s insurance would typically cover the physical damage to the vehicle.


Working with an insurance professional at Smallwood and Small to cover your commercial vehicles is a smart idea! We can help you select the best coverage for your business and about the policies best suited for your specific industry. Contact us today by calling 304-263-3361 to talk to an agent at our Martinsburg office, or 304-229-7227 to reach our Inwood office. You can also visit our auto insurance page for more information and a quick quote!

Photo Credit: Raidarmax. Licensed under CC BY-SA 3.0

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