Small business owners understand that reliable transportation is crucial to their daily operations. From delivering products to servicing clients, commercial vehicles play an essential role in the success of any business.
However, accidents and other unexpected incidents can happen at any time. Statista reports that there are over 12.15 million auto accidents yearly. So, having small business commercial vehicle insurance is essential.
Let’s discuss everything you need to know small business commercial vehicle insurance!
Small Business Commercial Vehicle Insurance
Business commercial vehicle insurance is a type of insurance policy that protects your business’s commercial vehicles from physical damage and liability. It’s similar to a personal auto insurance policy with a few significant differences.
For instance, business auto insurance is a must-have if your company owns or leases vehicles like trucks, vans, or cars. It covers damages and accidents that can happen while your vehicles are being driven for business purposes, such as making deliveries or transporting goods.
As financial advisors specializing in semi-truck financing requirements, we’ve seen firsthand how essential it is for small business owners to have commercial vehicle insurance. Small business commercial vehicle insurance can help safeguard your business from financial loss due to accidents, theft, or damage to your commercial vehicles.
How Does A Commercial Auto Insurance Policy Work?
The typical commercial auto insurance policy will include several types of coverage, such as liability, collision, and comprehensive coverage.
Liability coverage is required by law and helps pay for damages and injuries your business is responsible for in an accident. Collision coverage helps pay for damages to your commercial vehicle in an accident. In contrast, comprehensive coverage covers non-collision-related incidents such as theft, fire, or natural disasters.
When you purchase a commercial auto insurance policy, you’ll pay a premium to the insurance company in exchange for coverage. Your premium will depend on several factors. We’ve learned the most important factors that influence small business commercial vehicle insurance coverage include:
- The number of vehicles you insure
- The type of vehicles
- The driving record of your drivers
- The level of coverage you select
If you ever need to file a claim, you’ll pay a deductible, and the insurance company will pay for the rest of the covered damages.
It’s important to note that every commercial auto insurance policy is different. At Mission Financial Services, we recommend you always work with a knowledgeable agent or broker. They can help you understand the coverage options available to you and select the right policy for your business.
Who Should Get Business Commercial Vehicle Insurance?
Like standard business insurance, any business that owns or leases business vehicles should consider getting commercial auto insurance coverage. Here are some examples of the companies that should have small business commercial vehicle insurance:
- Delivery and courier services: If your business involves transporting goods, you’ll likely need commercial vehicle insurance. For example, if you own a package delivery service and use vans or trucks to deliver packages, you’ll need insurance to protect your vehicles and drivers in case of accidents.
- Construction companies: Many construction companies use heavy-duty trucks and other commercial vehicles to transport materials and equipment to job sites. These vehicles are often subjected to harsh conditions, so having insurance coverage is critical.
- Landscaping and lawn care services: Commercial vehicle insurance is a must-have if your business uses vehicles to transport lawn equipment and supplies to job sites. This coverage can help protect your business from financial loss if your vehicles are damaged or involved in an accident.
- Food and beverage businesses: If your business is in the food and beverage industry, such as a food truck or catering company, and you use commercial vehicles to transport food and supplies. In these cases, commercial vehicle insurance can help protect your business in case of vehicle accidents or damages.
- Any business with company-owned vehicles: Even if your business doesn’t fit into one of the above categories, if you own or lease vehicles for business purposes, you should strongly consider commercial vehicle insurance. It’s always better to be safe than sorry, and having insurance can provide peace of mind and financial protection in case of unexpected incidents.
What’s Covered By Commercial Auto Coverage?
A typical commercial vehicle insurance policy includes several types of coverage, each of which is designed to protect your business’s vehicles and drivers in different ways. Let’s look at some of the most common types of small business commercial vehicle insurance coverage included in a typical commercial auto policy:
- Liability coverage: Also known as auto liability coverage, this type of coverage is required by law in most states. It helps pay for damages and injuries you are responsible for if you or one of your drivers causes an accident. For example, suppose one of your delivery drivers causes an accident, and the other driver is injured. In that case, liability insurance can help pay for medical payments, property damage, and other related expenses.
- Collision coverage: Collision coverage helps pay for damages to your commercial vehicle if it’s involved in an accident or collision, regardless of who is at fault. For example, if your driver accidentally hits a curb and damages the front end of your delivery truck, collision coverage can help pay for the vehicle repairs.
- Comprehensive coverage: This coverage helps pay for damages to your commercial vehicle caused by non-collision events. Non-collision events could be anything from theft, vandalism, or fire to weather-related damage. For example, comprehensive coverage can help pay for the repairs or replacement if your truck is stolen or damaged in a hailstorm.
- Uninsured or underinsured motorists coverage: Another typical coverage, this one, protects your business if one of your drivers is involved in an accident with an uninsured or underinsured driver. For instance, if an uninsured driver hits your delivery truck, this coverage can help pay for damages and medical bills for your driver and passengers.
These types of coverage are essential for any business that uses commercial vehicles. Accidents and unexpected incidents can happen anytime.
The right small business commercial vehicle insurance coverage can help protect your business from financial loss and legal liability.
Without proper insurance coverage, you could be held responsible for damages and injuries and may have to pay out of pocket for repairs and medical expenses. If you don’t have the funds for repairs, you may need to consider a semi-truck repair loan.
Understanding Commercial Auto Insurance Cost
Like personal auto insurance policies, the cost of commercial auto insurance can vary widely depending on several factors. Here are some of the typical costs to consider when looking at small business commercial vehicle insurance:
- Type of business and vehicles: The kind of business you own and the type of insured vehicle you use can significantly impact the cost of insurance. For example, a construction company that uses heavy-duty trucks will likely pay more for insurance than a catering company that uses smaller delivery trucks.
- The number of vehicles: The more vehicles you need to insure, the higher your insurance costs will be. Many insurance providers offer discounts for businesses that insure multiple vehicles, so it’s worth asking your provider if you’re eligible for any commercial fleet discounts.
- Coverage limits: The higher your coverage limits, the more you’ll pay for insurance. However, it’s essential to have sufficient coverage to protect your business from financial loss in case of accidents or other incidents.
- Driving history: Your driving record and the driving history of your employees can also affect your insurance rates. You may pay higher premiums if you or your employees have a history of accidents or traffic violations.
- Location: The location of your business and where your vehicles are driven can also impact your insurance rates. For example, companies in areas with high traffic or accident rates may pay more for insurance.
Overall, the cost of a small business auto insurance policy can range from a few hundred to several thousand dollars per year, depending on your business’s unique needs and circumstances. Working with an experienced insurance agent or broker is important to find the right coverage at a price that fits your budget.
If you want to become a semi-truck driver, you must understand commercial vehicle insurance. Having small business commercial vehicle insurance is a significant investment that can protect your business from financial loss and legal costs in case of accidents, theft, or other incidents.
At Mission Financial Services, we offer a range of easy financing options to help you purchase the commercial vehicles you need to keep your business moving forward.
Contact us today to learn more about our financing solutions. We can help you get the necessary vehicles to grow your business.