What vehicles are covered?
There are three options available under a Commercial Auto policy.
- Only those vehicles your business owns.
- All vehicles your business owns, hires or leases
- All vehicles used for the business, including those it does not own, hire or lease.
The third option is the most comprehensive, as it also provides coverage to a business when an employer or owner is driving a personal vehicle in business.
The Commercial Auto policy is comprised of two major components; Physical Damage and Liability coverage.
Physical Damage includes;
- Collision, coverage for losses that result from a collision with an object.
- Comprehensive, basically covers most damage which is not covered under collision, such as theft, glass breakage, falling objects, a collision with an animal etc.
Liability Coverage includes;The Liability portion of the policy will cover your business for damages your business may be legally responsible for because of bodily injury or property damage caused by a vehicle covered by the policy, up to the policy limits.
The insurance company is also obligated to provide the business with the proper defense or settle the lawsuit. The decision to contest a lawsuit or settle rests with the insurance company.
Also keep in mind that Punitive Damages can be awarded if there is “gross negligence”, such as drunk or reckless driving.