Deciding to expand your fleet is exciting! After all, it means your business is growing and so are your potential profits. However, with this growth also comes the potential for more risks.
Whenever a business expands its fleet of vehicles, all of the business commercial auto insurance coverages should be reviewed to make sure they’re still adequate. There are some particular coverages, however, that should receive special consideration.
Join us as we explore the ins and outs of commercial vehicle insurance to ensure that your expanding fleet remains protected on and off the road.
When Expanding Your Fleet – Consider these Commercial Auto Insurance Coverage Updates
WHAT DOES COMMERCIAL AUTO INSURANCE COVER?
According to the most recent estimates, there are 275,913,237 personal and commercial vehicles registered to drivers in the United States.
For those businesses that rely on vehicles, whether it's a single delivery van or a fleet of company cars, having the right insurance isn't just a recommendation, it's a necessity. But simply relying on personal auto insurance won't do. That's where commercial auto insurance steps in, specifically designed to navigate the unique risks and coverage needs of businesses.
- Increased liability: Businesses face greater legal and financial exposure compared to individuals. Commercial auto liability insurance offers higher coverage limits to safeguard your company's assets.
- Specialized vehicles: From catering trucks to construction equipment, commercial policies adapt to cover a wider range of vehicle types beyond standard cars.
- Protecting employees: Coverage extends to authorized drivers using company vehicles for work, ensuring financial security even if an accident occurs.
- Business-specific risks: Tailored options address concerns like transporting goods, making deliveries, or operating during extended hours.
So, what does commercial auto liability insurance cover? Ultimately, these business auto policies often provide coverages similar to those found in personal auto policies. This includes:
- Property Damage Liability: Covers damage caused to other people’s property.
- Bodily Injury Liability Coverage: Covers injuries that other people sustain.
- Personal Injury Coverage: Help cover injuries that the driver and passengers sustain.
- Comprehensive and Collision Coverage: Used to cover the vehicles a business owns.
- Uninsured and Underinsured Motorist Coverage: Help pay for damage and injuries caused by a driver who doesn’t have sufficient insurance.
Most businesses that own vehicles that are driven on public roads need commercial auto insurance. If you’re expanding your fleet, it is important to reevaluate your commercial auto liability insurance policy as a whole. Paying special attention to the following coverages is also advised.
Comprehensive and Collision Limits
Adding vehicles to your business’ fleet increases the value of the cars and trucks that the business owns. The comprehensive and collision limits in your business’ commercial auto insurance policy probably should be updated to reflect the fleet’s increased value.
Comprehensive and collision coverages generally insure company-owned vehicles against various sources of damage. Their limits are normally should be equal to the value of a company’s insured vehicles, so the limits likely need to be increased since the fleet’s value has increased.
It’s important to note that if your business has leased or financed the new vehicles, you may be required to increase the comprehensive and collision limits in your business’ commercial auto policy. Many leases and loans require vehicle owners -- including businesses that own vehicles -- to carry insurance that’s at least equal to the leased or financed vehicles’ value.
Bodily Injury and Property Damage Liability Limits
You may also want to increase the bodily injury liability and property damage liability limits in your business’ business auto insurance policy. These coverages normally protect your business from potential liability lawsuits if an employee causes an accident.
Specifically, you may want to look at the aggregate limit of each coverage. Most commercial auto liability insurance policies have both per-occurrence and aggregate limits for these coverages. Per-occurrence limits usually dictate how much a policy will pay for claims arising from a single accident, and aggregate limits typically determine how much a policy will pay over the life of the policy.
The potential cost of a single accident doesn’t necessarily go up when your business purchases additional vehicles, so you might not need to increase any per-occurrence limits. The likelihood of having multiple accidents occur during a single policy’s effective period, however, does go up when more company vehicles are on the road. Thus, you may want to increase the aggregate limits for these coverages in case several drivers are in accidents over a relatively short period of time.
Limits for Products or Equipment in Vehicles
If your business keeps products or equipment in company vehicles, make sure the coverage offered for these items is still sufficient. With more vehicles on the road, your business will likely have more products and/or equipment to insure. Even if the items themselves aren’t too expensive, their cumulative value can become substantial when adding a lot of new vehicles to a fleet.
Should your business need more coverage for products and/or equipment, there may be a couple of ways to procure additional protection. Sometimes it’s possible to increase the limits of an existing business auto insurance policy, and you can almost always get a new business auto insurance policy that has different coverages and limits if necessary. Alternatively, an inland marine insurance policy might offer complementary coverage for items at an affordable price. A knowledgeable insurance agent can help you evaluate the options that are available.
REVIEW ALL COMMERCIAL AUTO INSURANCE COVERAGEDS WITH AN AGENT
While you probably want to pay particular attention to these protections, you really ought to review all your business’ commercial auto insurance coverages when purchasing new vehicles.
For help reviewing your business’ current coverages and making adjustments if necessary, contact the independent insurance agents at World Insurance Associates. Our experienced team has the expertise needed to make informed recommendations and the independence required to help you compare insurance options from multiple companies.
HOW TO GET COMMERCIAL VEHICLE INSURANCE
Getting started with commercial auto liability insurance is simple with the right partner. At World Insurance, you can start your search for commercial auto insurance online.
Forget sifting through countless quotes and deciphering complex coverage options. We do the legwork, comparing proposals from reputable providers and presenting you with tailored options that align with your unique business needs and risk profile.
This transparency allows you to make informed decisions with confidence, knowing you're not just getting a competitive price, but the right coverage for your journey.
Get started online today and connect with our experts.