Share This Page
Share Pin It Email Print

Liability Insurance For Commercial Vehicles

Liability car insurance is the most common required form of personal car insurance in the country, and this is no different for those who own and operate commercial vehicles.

Between local state laws and federal laws for certain businesses that use vehicles to transport goods or passengers over state lines, chances are if you use a vehicle for business, you need liability auto insurance.;

Commercial Liability Auto Insurance

Commercial liability insurance helps protect you from costs associated with injuries or property damage suffered by others in an accident caused by you or your employee in your insured commercial vehicle.

Commercial liability car insurance is broken up into two different coverages:

  • Bodily injury insurance coverage.
  • Property damage insurance coverage.

Bodily Injury

If, while driving on the job, you or an employee are found to be at fault for an accident that causes bodily injury to another person, this coverage will help pay for costs associated with the injury or injuries.

Bodily injury coverage is often broken up into two limits:

  • Limit per person (when one person is hurt).
  • Limit per accident (when multiple people are hurt).

Property Damage

If you cause an accident that results in damage to someone else’s property (e.g., car or house), this coverage will help pay for costs associated with repair or replacement of that damaged property.

Unlike bodily injury coverage, property damage is only tied to one limit (see below).

Combined Single Limit

When purchasing personal car liability insurance, you will probably notice that your policy will include three limits:

  • Two bodily injury limits.
    • Example:
      • $25,000 per person.
      • $50,000 per accident.
  • One property damage limit.

However, when shopping for commercial auto insurance, you may notice that several commercial car insurance providers offer just one liability limit.

This one limit is called a combined single limit. It is often quite large, with some companies' lowest limits starting at $100,000 and going up to the millions of dollars.

A combined single limit on a commercial auto insurance policy will cover both bodily injury and property damage liability claims.

Having a combined single limit can be beneficial especially in scenarios where one type of liability claim is much higher than another. For instance, if you cause an accident that causes a considerable amount of damage to someone’s property but no bodily injuries, you will have the entirety of your combined single limit to use towards the property damage.

Who Needs Commercial Liability Insurance?

If you use a car, truck, or van for business purposes, or run a fleet of these types of vehicles, you need commercial auto liability insurance.

Not only is it mandatory in most states–certain motor carriers, freight forwarders, and freight brokers who transport goods or passengers across state lines are also mandated by federal law to have liability car insurance.

Besides the fact that you are most likely required by law to have commercial liability auto insurance, there is one other very important reason to have liability as a big part of your commercial insurance policy:

Having liability insurance can greatly help you avoid lawsuits that put your company at risk.

Shopping Around and Getting Quotes

Because commercial auto liability insurance is so commonly required, it is readily available. Most companies that sell personal car insurance also have divisions that sell commercial auto insurance.

Additionally, most of these companies offer online commercial car insurance quotes, which can be a great tool when shopping for a commercial policy.

You may find that commercial auto insurance companies will only sell limits that are higher than state- or federally-mandated limits. This is because insurance companies consider the everyday use of commercial vehicles to carry with it higher risks than personal vehicle use. As a result, the legal minimum limits are often not sufficient to cover commercial liability.

Commercial auto insurance policies are highly customizable. After receiving an initial quote, work closely with your auto insurance agent to create a policy that is optimal for your business needs.

DMV.ORG BBB Business Review