Arm your business with the right commercial vehicle insurance

4 minute read  

Do you use your vehicle for work-related tasks? It’s important to know that if you’re involved in an accident during these activities, your personal car insurance may not cover you. This can be the case whether you’re a small business owner making deliveries or a solo contractor driving from jobsite to jobsite.

If your vehicles are owned by your business or primarily used for business purposes, it’s likely commercial vehicle insurance may be right for your business. This coverage is tailored to help keep you, your employees, and your company vehicles well-protected.

What is commercial vehicle insurance?

Commercial vehicle insurance, commonly referred to as commercial auto insurance, can be an essential policy tailored to meet the needs of vehicles used for business activities. This type of insurance can provide comprehensive coverage for a wide range of vehicles, from small cars used for client visits to large trucks transporting goods. It can cover various risks, including accidents, theft, and damage to others’ property. Importantly, commercial vehicle insurance can include liability coverage, which is crucial in helping to protect your business from financial losses if a vehicle is involved in an incident that causes injury or damage to third parties.

Do I need commercial vehicle insurance?

You’re likely to need commercial vehicle insurance based on three things.

Think about how you use the vehicle. If it’s regularly used for business tasks like client meetings, transporting goods, or deliveries, commercial vehicle insurance may be a good idea.
The vehicle type is also key. Heavier vehicles or those carrying specialized equipment, which cost more to fix or can cause more damage in a crash, usually need commercial insurance. Specialized vehicles, such as those equipped with modifications for business (like hydraulic lifts or refrigeration units), often fall outside the coverage scope of personal auto insurance.
Ownership matters. Typically, commercial insurance is necessary if a vehicle belongs to a corporation, partnership, or sole proprietorship. Even employees using their vehicles for business purposes might want to consider commercial insurance. In some cases, if an employee has an accident while conducting business, their personal auto insurance might not cover the damages.

What does commercial vehicle insurance cover?

Commercial vehicle insurance can include several different coverages depending on your business needs. It’s important to always speak to your insurance specialist, they can help identify the coverages you may need to protect your business on the road. While the specific coverage can vary, these are some general types of coverage you can expect:

Liability Coverage

This coverage can help protect you if your vehicle injures someone or damages their property. Imagine you own a delivery business, and one of your drivers accidentally backs into a customer’s fence, causing damage. Your business could be liable for the damage, your commercial vehicle insurance can help cover the costs or potential financial losses.

Accident Benefits

This coverage provides benefits to you or other insured individuals in case of injury in an auto accident. It can include rehabilitation treatment, income replacement, and other services needed for recovery. Suppose one of your employees, while driving a company car, gets into an accident and suffers injuries. Your commercial vehicle insurance accident benefits could help cover their medical and rehabilitation expenses.

Loss or damage coverage

This type of coverage can help cover your vehicle against direct and accidental loss or damage, which also extends to the vehicle’s equipment.

Optional commercial vehicle insurance coverages for broader protection

Collision or upset coverage

This coverage can help with damage to your vehicle from collisions. It can cover your vehicle if it hits another vehicle or an object, or tips over. This coverage can be fundamental in incidents involving physical impact.

Comprehensive coverage

This coverage extends beyond collisions with other vehicles. It can protect your vehicle from a variety of non-collision incidents, like damages caused by falling or flying objects, vandalism, and missiles. It’s a broader coverage that can handle situations that collision or upset coverage does not cover.

Specified perils coverage

This type of coverage focuses on specific, named risks. These can typically include natural disasters such as earthquakes, windstorms, and hail, as well as human-related risks like theft and fire. It’s generally more targeted than comprehensive coverage, and can focus on a predefined list of perils.

All perils coverage

This is generally the most comprehensive option, combining the benefits of both collision or upset and comprehensive coverages. It typically covers a wide range of incidents, from collisions and theft, to weather-related damages.

Factors that can influence commercial vehicle insurance premiums

Your type of business

What your business does can play a part in how much you pay. Take a restaurant or retail store that does a lot of deliveries. They’re on the road a lot, dealing with traffic, tight schedules, and delivering goods to customers. This can increase the risk of accidents, so they may need more liability coverage. On the flip side, an IT consultant who’s mostly working from home and only occasionally uses a vehicle for work may not face the same risks. Their insurance needs might be simpler, and their premiums may be lower.

Where and how often you drive

The physical location of the business can also be a factor. Areas with high traffic congestion, higher crime rates, or are prone to certain weather conditions can be considered at higher risk. For instance, if your business is in a place with frequent flooding or heavy traffic, there’s a higher chance your vehicle might get damaged or be involved in a crash. This may effect your insurance costs. Daily travel distances can be a factor too. Driving 80 km every day can put you at a higher risk for accidents compared to someone who drives just 20 km. More time on the road can mean a greater chance of incidents, and your insurance premium may reflect that.

Claims experience

Past claims can be an indicator of future risks. If a business has a history of frequent insurance claims, insurers may view them as a higher risk, leading to a higher premium.

Ensure you’re covered with commercial vehicle insurance

TruShield understands the unique needs of businesses like yours. Whether you’re managing a single vehicle or an entire fleet, our tailored commercial vehicle insurance solutions offer the security and confidence you need. Reach out to TruShield for a policy that’s custom-fit for your business. Get a quote today.

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.