Commercial auto insurance provides financial protections for the driver and passengers in a vehicle when a covered incident occurs. This type of insurance can minimize a variety of financial risks your company faces. When does this type of auto insurance apply to an incident?
When Will Commercial Auto Insurance Cover a Loss?
Commercial auto insurance is for a specific vehicle. It is coverage provided for the business operations of this vehicle. It does not apply if the driver uses the car for personal use (in most cases).
The policy will outline the type of coverage provided. Most policies cover both property and liability losses. It may also pay for lawsuits associated with the accident. It can pay for theft, storm damage and collisions. You should understand the terms of the policy before choosing it.
What Happens When a Passenger Suffers an Injury?
Commercial auto insurance policies can cover passenger injuries in most situations. For example, if your driver is transporting a customer to another location, that party has coverage. In this situation, it will pay for the losses of the passenger. This may include:
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Medical transport after an accident occurs
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Emergency medical care necessary
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Lost time at work if the person misses work due to injuries
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Long-term medical needs of that person, if the business is responsible
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Pain and suffering in some situations
The coverage applies when the company is responsible for the losses. If another driver causes these losses, that party’s liability insurance should apply. However, if you have ample uninsured/underinsured motorist coverage, this can help fill in many gaps.
What If a Lawsuit Occurs?
Sometimes, a company faces a lawsuit from an injured passenger. Your policy will often help you defend against such claims. If the lawsuit goes to court, the insurance company will provide legal defense. This is a key component of your coverage.
The costs of the settlement may have coverage under your commercial auto insurance. However, the policy has limits. If you do not have enough liability insurance, this could mean your company pays for the losses.
Discuss these risks with your business insurance agent. Because lawsuits are costly, it is very common for businesses to need a higher level of coverage. This is very beneficial if you transport passengers not affiliated with your company on a regular basis.