Everything Business Owners Need to Know About Commercial Auto Insurance

Commercial Auto Insurance Throughout the United States, business owners rely on vehicles for many purposes. Vehicles, whether they are passenger cars, delivery vans, cargo trucks, or specialized vehicles, are essential for service delivery. These vehicles also represent a significant investment. Protecting vehicles operated for business purposes is a critical component of risk management. For Southern California business owners, commercial auto insurance provides comprehensive protection for your business investments. In this guide, we will explore commercial auto insurance and how it can help you manage the risks associated with commercial vehicle operation.

What is Commercial Auto Insurance?

Most vehicle owners know that auto insurance is a requirement to operate on American roads. Business owners typically have the same requirements. For many business owners, vehicle operation is an intrinsic part of the business itself. Commercial auto insurance is a type of policy designed for commercial operation of motor vehicles, such as cars and trucks; in other words, it covers the vehicles used for business purposes. CA commercial auto insurance is very much like a standard auto policy, but often has specific and unique additions that make it a valuable risk management tool for business owners. 

The Basic Components of Commercial Auto Insurance

Commercial auto policies are available to business owners who use vehicles as part of their business operations. There are four basic coverages that align with the insurance available for the owners of privately-owned vehicles. These four coverages are:

  • Liability coverage – protects the business from property damaged caused by you and your employees. 
  • Bodily injury coverage – covers medical expenses for the driver and passengers of a commercially-operated vehicle. 
  • Collision coverage – pays for damage to your commercial vehicles resulting from collisions with other vehicles or objects. 
  • Comprehensive coverage – provides reimbursement for the costs associated with repairs or replacement of vehicles damaged in an accident regardless of who is at fault. 

The four coverage areas provide protection for a wide range of risks, but business owners face unique risks in their operations that drivers of personally-owned vehicles do not. These unique risks necessitate additional coverages provided by an OC commercial auto policy.

Additional Insurance Coverage Types for Commercial Vehicles

Many businesses require their employees to use their own vehicles as part of the company’s operation. This is typical of businesses that offer local delivery, such as restaurants. Unfortunately, most CA commercial auto insurance policies do not cover personal vehicles or those leased from third-party vendors. If an employee were to become involved in an accident at work, the business itself may still be held accountable even though the business is not the vehicle owner. To protect against this unusual risk exposure, a specialized policy known as hired and non-owned auto insurance is available. This policy is recommended for businesses where employees regularly drive their own vehicles for work purposes. 

Because every business is different and uses vehicles in different ways, additional coverages are available. Specialized commercial auto insurance policy coverages include:

  • Trailer interchange coverage – provides protection for trailers your company uses but that are owned by others.
  • Rental reimbursement coverage – if your company’s vehicles are damaged in a collision, this covers the costs associated with renting a temporary replacement while the vehicle is repaired. 
  • Equipment coverage – covers additional equipment used by your business, like forklifts and trailers. 

Your CA commercial auto insurance provider can help you pinpoint the exact coverage types and amounts you need to protect your business interests against liabilities. 

Benefits of Commercial Auto Insurance

To ensure the health of your business, managing risks is an important part of the picture. CA commercial auto insurance policies help to manage the risks associated with commercial vehicle operation. There are many other benefits of such insurance, including:

  • Higher coverage limits than personal policies, helping to provide protection for expensive vehicles and equipment.
  • Tax savings – most commercial auto insurance policy premiums are tax-deductible.
  • Flexibility in coverage, protecting specific employees or the entire employee roster. 

Your vehicles – cars, trucks, and cargo vans — are essential to your business. Protect your vehicle investment and your employees with the comprehensive coverage of a CA commercial auto insurance policy. 

About Coastal Oak Insurance Services 

At Coastal Oak Insurance Services, we strive to protect your personal and business assets from coast to coast. When you work with us, you’re family. Contact us today at (949) 519-3738 to learn more about how we can provide you with comprehensive and tailored insurance coverage.