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Commercial Auto Insurance

The Importance of Commercial Auto Insurance

Good commercial auto insurance is specifically designed for all types of vehicles utilized in the operation of a business. It helps to safeguard the policyholder from a myriad of liability issues and from expensive repair bills should a commercial vehicle be in a crash. It also offers a whole host of other protections important to business owners.

Who Needs It

All businesses should have commercial auot insurance. Not only is it required legally, it is also needed to ensure that business owners can avoid any unnecessary legal, medical or repair expenses. Businesses both big and small can make great use of this kind of coverage.

How It Operates

The commerical auto policy is similar to personal policies. As in standard car insurance, the company will need to first come up with what kinds of coverage they need and also levels of the coverage they desire. Once this is done, the business then purchases the policy of choice. The insurance company will then give the business enterprise a contract to sign to initiate the coverage. Coverage begins when the contract is signed and then the policyholder is obliged to pay the premiums consistently and on time until a claim needs to be filed. This is accomplished in accordance with the set procedures of the individual insurance provider. Once a claim has been filed, the insurance company contacts the insured company with its assistance on how to proceed.

Types of Coverage

There are two main types of coverage with commercial vehicle insurance. The most common is ‘per vehicle’ coverage, which is usually purchased by small to medium-sized enterprises. Larger firms will find that it is more cost-effective to buy fleet insurance. A fleet insurance policy is a comprehensive policy that provides coverage for all the vehicles and drivers at a company simultaneously. This is different from the per vehicle insurance policy, as per vehicle insurance is an individual policy that must be obtained for each vehicle used for the business. All of the employees that use that particular vehicle are required to be named on the policy.

Businesses covered by commercial auto insurance will also have liability coverage should someone take legal action that is related to the company’s vehicles. This is important because if one of a business’ vehicles is at fault in an accident, the resulting costs could impact the business’ finances significantly.

Big Benefits

Commercial auto insurance is designed very specifically for vehicles used in business and it provides terrific liability coverage. It also provides financial protection from repair costs should a company vehicle be damaged. It is often a very wise move to take full advantage of the best policy that is allowable for a business’s budget.