Choosing the right automobile insurance coverage for your commercial vehicles can be complex, especially if your business uses multiple vehicles or many different drivers. Nevertheless, getting the right insurance is a key part of protecting your company’s cars, trucks, and vans from a variety of threats, and protecting your business from expensive third-party liability claims.

Here are five key things to keep in mind when you are choosing automobile insurance coverage for your business:

  1. The types of vehicles you use for your business

Heavy vehicles such as trucks and buses may require higher Third Party Liability limits because they can cause more damage in a collision. Vehicles such as construction equipment, that are used off-road but also drive on public roads, may need special policy change forms because they present unique risks.

If your business uses multiple vehicles they may be considered a “fleet” which provides some benefit as coverage can be more tailored to your business needs.

  1. How your vehicles are used

Vehicles used for long haul trips face different risks than vehicles that are used for local deliveries. Similarly, vehicles used to transport people will have different exposures.

The cargo your business moves might also affect the coverage you purchase. For example, if you carry hazardous substances, you will likely need higher Third Party Liability limits to cover the possibility of environmental contamination. If you transport cash, precious metals, or high-value goods, you may want to purchase commercial cargo insurance to protect against theft.

  1. Who will be driving your vehicles

The individuals who will be driving your vehicles play a role in your commercial automobile exposure. To safeguard your business and keep your insurance costs low, it is imperative that you hire properly qualified drivers and check whether they have experience with the types of vehicles they will be operating. Inexperienced drivers and drivers with poor driving records may subject you to higher deductibles, higher premiums, and lower Third-Party Liability limits.

For example, if the only person who drives your flower delivery van has 20 years of experience and a spotless driving record, the chances of an accident, particularly one with substantial liability are greatly reduced compared to an inexperienced driver with multiple speeding violations on their record.

  1. Liability limits

The liability limits you choose for your commercial vehicle insurance policy can make the difference between being fully covered and facing a devastating financial blow. Carefully consider the potential for an accident with each of your vehicles, the amount of damage they could cause given their size, the cargo they carry, and any legal or contractual requirements.

  1. Coverage options

Commercial vehicle insurance normally has a range of coverage options. When deciding on a policy, you may want to consider one or more of the following:

  • Higher Third Party Liability limits, as discussed above.
  • Collision coverage can help pay for damage to your vehicle if it is involved in a collision with an object or another vehicle.
  • Comprehensive coverage, to protect your vehicle against risks other than collisions. These risks can include theft, vandalism, fire, falling objects, and water damage.
  • Cargo insurance, which is vital for businesses that transport goods. Although standard commercial vehicle insurance offers some coverage for the contents of business vehicles, alternate coverage is needed if cargo is carried for compensation.
  • Rental vehicle reimbursement may help with the cost of renting a vehicle while your commercial vehicle is being repaired or replaced if the reason for the repair or replacement is covered in the policy. This option can be crucial for companies that rely heavily on their vehicles.
  • Accident benefits coverage can assist you or your employees if they are injured in a vehicular accident. This mandatory coverage for commercial vehicle insurance policies applies regardless of who caused the accident. It can help by providing income replacement and coverage for medical expenses that are not in the injured party’s provincial health care plan. In some provinces additional optional coverage is available.

Another policy that should be considered is:

  • Non-owned automobile insurance can protect your business against liability claims if vehicles that are not owned by the business are used for business purposes. This automobile insurance option is vital. For example, if an employee is involved in an accident while using their personal vehicle for business purposes, their personal auto insurance will not provide any coverage for your business. In such a case, Non-owned automobile insurance will cover defence costs if the business is named in a law suit and will provide excess coverage if the employee is uninsured or has insufficient limits.

Ensure your vehicles are protected

It’s vital that you protect your commercial vehicles with the appropriate coverage in order to stay protected. To learn more, visit our commercial auto insurance page today.

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.