Commercial Auto Insurance

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Commercial Auto Insurance

What is Commercial Auto Insurance? Description


Commercial Auto Insurance  is a form of business insurance that covers risks associated to business vehicles.


Commercial auto insurance is designed to provide financial protection for business vehicles against accident, theft, injury, burglary, collision, attempts, fire and other unforeseen situations that have to be specified in the commercial auto insurance contract. This kind of policy also covers business staff while driving insured company vehicles, their own vehicles or rented vehicles for business purposes.

 

Synonyms

 

Commercial auto insurance is also known as:

  • Commercial Vehicle Insurance
  • Business Auto Policy (BAP)
  • Commercial Car Insurance.

History of Commercial Auto Insurance

 

The first concept of car insurance is related to cargo ships used during the settlement of colonies in China. In order to protect these ships and their cargo, insurance policies were developed. With the invention of the automobile, new needs arose because motorists must be covered against death, personal injury, property damage. The automobile itself can also be damaged or stolen. Moreover, a car can cause damages to pedestrians, bikers and cyclers and insurance contract should cover also these risks. During the 20s century the number of accidents increased. An English company was the first to offer a car insurance policy in 1895 and in the US it was introduced in 1898.

 

Cost of Commercial Auto Insurance. Premium

 

The premium that insurers have to pay may be lower or higher depending on various factors such as:

  • Company location
  • Number of accidents / Driver(s) records
  • Type of vehicle. The autos of a company can be distinguished into three categories:
    1. Private passenger cars. Private passenger autos are vehicles owned by the company but not used for commercial purposes.
    2. Commercial vehicles. Commercial autos are trucks over three-quarters of a ton, truck tractors, semi-trailers, commercial and utility trailers.
    3. Public autos. Public autos include vehicles used for public transport such as taxis and rental cars.
  • Deductibles (own risk)
  • Safety / anti-theft devices.

Coverage of Commercial Auto Insurance. Exclusions

 

The most common type of commercial auto insurance covers a driver liable for damaging cars or injuring third parties. Other types of commercial auto insurance could include optional coverage which could be: third-party liability, uninsured, collision, property damage, direct compensation, family protection, other benefits.

 

Every insurance company formulates different types of commercial auto coverage and some of the possible exclusions could be:

  • Carrying persons for a fee
  • Intentional acts
  • Racing or stunt driving.

In many countries commercial auto insurance is mandatory for small and large businesses. Specific laws regulate the minimum insurance requirement for commercial vehicles.

 

Fleet Insurance and Individual Policies

 

Depending on the number of vehicles and drivers to insure we can distinguish a fleet insurance and individual car policies. Fleet insurance provides coverage for all the vehicles of a business and is normally cheaper per car than an individual policy.


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