What does commercial auto insurance cover?
Commercial auto insurance covers the cost of accidents involving vehicles owned by your tech company. It can help pay for vehicle repairs, medical expenses, lawsuits, and costs not covered by uninsured motorists.
Commercial auto insurance provides coverage for:
Physical damages
Two optional types of commercial auto insurance coverage pay for physical damages or replacement of your company vehicles.
Collision coverage covers your vehicles when they are in an accident.
Comprehensive coverage pays for damages to your vehicles from other incidents, such as theft, vandalism, fire, or storms.
Example: A technician drives the company van on a snowy day to provide computer repair services for a client. On the way back to the office, she slides on ice and hits a telephone pole, denting the van. Collision coverage would cover the cost to repair the van.
Medical expenses
If you have commercial auto insurance, you can expect it to cover medical expenses for anyone in your company vehicle who is injured in an accident, regardless of who is at fault.
Example: The owner of an IT staffing company travels with an account manager in the company car to meet with a client. Before reaching the meeting, the car rear-ends a bus and the driver and passenger sustain injuries.
The company's commercial auto policy covers their medical expenses.
Liabilities
Liability coverage is important for any tech company that owns and operates a vehicle. The coverage included in commercial auto insurance pays for:
- Damage to another person’s vehicle or property if a company vehicle is in an accident
- Bodily injury or death if the driver of your company vehicle is at fault in an accident
- Legal defense costs if another person sues over the incident
Example: An installation specialist at a telecommunications company falls asleep at the wheel while returning from a job, hitting another vehicle. The passengers in the other vehicle sustain major injuries and sue the company.
Liability coverage would cover the damages and medical costs for the individuals in the other vehicle, as well as legal fees associated with the accident.
Uninsured motorists
Even though auto insurance is mandatory in most states, many drivers still do not have it. If an uninsured driver hits your company vehicle, uninsured motorist coverage pays medical expenses for the people in your company vehicle. It may also pay for damages to the vehicle.
Twenty-two states require uninsured motorist bodily injury coverage. Some states require uninsured motorist property damage coverage, and other mandate underinsured bodily injury coverage.
Example: Three instructors in an IT training company use the company vehicle to travel to a corporate training session. While heading back to the office, they are involved in a head-on collision with a vehicle that ran a red light.
The instructors sustain major injuries but the at-fault driver is uninsured and cannot pay out-of-pocket for expenses. The company’s commercial auto policy’s uninsured motorist coverage helps pay their medical expenses.
Commercial auto insurance does NOT cover:
Hired and non-owned auto insurance covers vehicles your business uses but does not own
Many tech companies depend on employee-owned vehicles or rent a vehicle to conduct business. But commercial auto insurance does not cover personal, leased, or rented vehicles. And your business can still be held accountable if an employee gets into an accident in a personal or leased vehicle.
Hired and non-owned auto insurance is made for vehicles that your business uses but does not own. This policy is recommended for tech businesses where employees regularly drive their own cars for work purposes.