Why You Need To Obtain a Commercial Policy for Vehicles Used in Your Business

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Vehicles that are used in business need to have a commercial insurance policy in order to be properly covered. Personal lines of auto insurance do not cover vehicles that are used for commercial purposes such as a contractor driving to job locations. These types of insurance policies are generally bought by small business owners from the same insurance company that they have their other commercial policies with such as their general liability insurance. 

This Wikipedia entry provides the classifications of what a commercial vehicle is. One of the definitions includes that the vehicle is owned by a company rather than an individual. Even if a small business owner has the vehicle in their own name they still need to insure it as a commercial vehicle if it used for business purposes. 

A vehicle will also be considered a commercial vehicle if it exceeds a certain weight. Many companies consider anything over 10,000 pounds gross vehicle weight to be a commercial vehicle. The high cut-off is anything over 26,001 pounds which all insurance companies consider to be commercial vehicles. So, even if you’re just commuting back and forth to work in a dump truck the sheer weight of the vehicle means you need to have a commercial auto insurance policy on it. Another criterion is that if you are hauling hazardous material your vehicle will be considered one being used for commercial purposes. 

Every state requires commercial vehicles to have an insurance policy in place to cover liability. This includes commercial truck insurance Chicago IL which can be bought from virtually every insurance agent in that part of the country. Depending on the type of vehicle it can be insured either through one of the large insurance firms or through an insurance company that specializes in commercial vehicles. None of the big insurance companies will provide coverage on taxis, for example, while there are a few insurance companies in Chicago that will cover these types of vehicle’s uses. 

The types of coverage typically found on a commercial vehicle can be read about in here. Beyond liability coverage, there are also other coverages available such as uninsured motorist, comprehensive, collision, and towing/roadside assistance. The premium will be determined based on the type of vehicle, where it is garaged, the coverages, and the driving records of whoever will be operating the vehicle(s) that make up a company’s fleet. 

The commercial insurance policy only covers the vehicle itself and whatever additional gear is a permanent part of it. It doesn’t cover whatever the vehicle may be transporting. There is a rider available, with an additional premium, to cover the items that are being transported such as if they are stolen or damaged in an accident. 

When it comes to comprehensive and collision coverage the higher the deductible the less the premium will be. How the deductibles work can be illustrated by using an example of a $500 collision deductible. If there is a claim on this coverage and the insured vehicle sustained $2,000 in damage then the insurance company will pay for $1,500 of that damage while the business owner will pay the first $500.


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