What coverage does vehicle insurance for companies provide?


If you have an automobile or a whole fleet on your company's books, you should think about insuring all vehicles. The Business Auto policy (BAP) provides protection against liability of your employees driving any of the vehicles, and physical damage to the autos.

What Company Vehicle Insurance Covers

Commercial auto insurance contains two main liability coverages:

  • Liability Insurance protects anyone behind the wheel of a vehicle owned by the company against bodily injury and physical damage liability claims. All newly-acquired company vehicles are automatically covered under a Business Auto policy.
  • Physical Damage Insurance includes three types of coverage:
    • Collision coverage pays for damage to the company-owned vehicle sustained as a result of collision with another vehicle or a stationary object, regardless of fault;
    • Comprehensive coverage offers compensation for damage caused in situations other than collision;
    • Specified perils coverage is a limited type of comprehensive coverage and is also cheaper. It covers theft, fire and other specified causes of loss.

If you want a broader coverage, you can add an uninsured/underinsured motorist coverage and a medical payments coverage as endorsements.

What Vehicle Insurance for Companies Does Not Cover

You must be aware of certain pitfalls in your company's Business Auto policy and let your employees driving your covered autos, know that the following situations are not covered by your vehicle insurance. BAP does not provide liability coverage if your employee injures a co-worker who happens to be in the vehicle, and if your employee drives the vehicle for personal use. However, your employees might be covered for these situations by their own Personal Auto policies, if they have included the extended non-owned auto endorsement.

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