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Commercial auto insurance, also referred to as business car insurance, safeguards your company’s vehicle while it is on the road. Public liability and property damage, collision, comprehensive, specified perils, accident benefits, loss of use insurance, rental vehicle insurance, and accident forgiveness are the main coverage options.
Who Is Necessary to Purchase Commercial Auto Insurance?
Auto insurance is required in Alberta for all drivers. If, in addition to commuting, you use your vehicle for tasks related to your occupation, profession, or business, you may require a commercial policy rather than a personal auto policy. There are several factors to consider before deciding on the type of commercial auto policy you require.
1. Utilization of the Vehicle
This is the most important factor in determining whether or not you require commercial auto insurance. In contrast to your personal vehicle, commercial vehicles typically serve a specific, business-related purpose. As an example:
- Transporting goods or people in your vehicle for a fee
- Using your vehicle to provide delivery services
- Client visits
- Providing ride-sharing services
- Performing a service on your vehicle
- Transporting large amounts of tools or equipment
- Towing a trailer that will be used to conduct your business
Because your vehicle is used for a variety of business purposes, it is subject to different risks than personal vehicles. However, if your commercial use is only on occasion and does not involve transporting people or goods (for example, making deliveries), you may not require commercial auto insurance. That is why it is best to consult with a qualified broker at Krywolt Insurance to determine the best coverage for your specific needs.
2. Vehicle Type
Whether or not you require commercial auto insurance is determined by the type of vehicle you own. Vehicles used exclusively for your trade or profession, as well as heavy trucks and toll vehicles, are typically more expensive to replace than other types of automobiles.
It is best to have commercial auto insurance to protect your vehicle in this situation. For example, if you use the following vehicles as part of your job, you will almost certainly need commercial auto insurance:
- SUVs, for example, could be used to transport mobile veterinarians or physicians who visit patients in remote areas.
- Jeeps are frequently used for commercial purposes.
- Semi-trucks and delivery trucks are examples of trucks used to transport tools, equipment, or goods.
- Tractor Trailers—including seeders and harrows, as well as other farming equipment.
- Trailers—when transporting goods, materials, or animals.
- Vans, such as mobile pet clinics or food trucks.
3. Owner of the Vehicle
Are you the only person who owns your vehicle? In that case, you might only require personal auto insurance.
However, if your vehicle belongs to a company, corporation, or your employer, commercial auto insurance is almost certainly required.
4. Safeguard Your Vehicle Fleet
Obviously, if your Calgary or Alberta business owns a large fleet of vehicles, you must have commercial vehicle insurance for each car, truck, bus, and so on. Commercial auto policies are an excellent way to ensure that these important assets are properly protected while also getting the most out of your insurance policy because all vehicles listed as part of the fleet will be protected from damage and legal action.
Options for Commercial Auto Insurance Coverage
Commercial auto insurance is required if you or your employees use the vehicle for business purposes, such as transporting goods, animals, or people, or if you use the vehicle to provide a service. Similarly, commercial insurance will be required for heavy-duty vehicles used for business operations. Typical commercial auto policies include the following types of coverage:
- Liability insurance for third parties
- Insurance for accident benefits
- Coverage for public liability and property damage
- Collision insurance
- Coverage that is comprehensive
- Insurance against specific perils
- Insurance against loss of use
- Insurance for rented vehicles
- Forgiveness of mistakes
Third-Party Liability Insurance
Third-party liability coverage, which is included in all mandatory car insurance policies, protects you if you cause damage to another person or their property while driving your vehicle. As an example, suppose you’re delivering flowers and you rear-end another driver on your way to a client.
The person with whom you collided may file a claim against you. Third-party auto liability insurance ensures that you do not have to pay for any damage caused by the collision or the medical expenses of anyone you injure out of pocket. It will also shield you from legal costs and legal action as a result of the incident.
Accident Benefits Protection
Accident benefits, also known as mandatory insurance, protect the driver and passengers of a vehicle involved in a collision, regardless of who is at fault. Accident benefits differ from third-party liability in this way.
It usually includes:
- Compensation for medical expenses incurred as a result of an injury
- Medical services that are essential
- Medical supplies are essential.
- Coverage for wage loss
Coverage for Public Liability and Property Damage Liability/PLPD
In most cases, public liability and property damage insurance will protect you if you are the at-fault party in an accident. Whether you hit another vehicle, a person or an inanimate object like a road sign, if you’re at-fault for a traffic accident this makes you liable for any damage caused. This policy, also known as bodily injury and property damage, is the foundation of all vehicle insurance policies. It is divided into two sections:
- Public Liability—coverage for injuries you cause to others.
- Property Damage—includes damage to personal or public property caused by your vehicle, as well as vehicle damage to the other car involved in the incident.
Collision Coverage
Collision insurance, unlike third-party liability and accident benefit coverage, is not required in Alberta. However, if you rely on your vehicle for business purposes, you must protect it with both collision and comprehensive insurance—detailed below.
Collision coverage protects your vehicle in the event of an accident. Typically, mandatory insurance does not protect your vehicle, but rather other people, cars, and objects, as well as medical expenses for others. Collision coverage, on the other hand, pays for damage to your vehicle caused by a rollover or collision with another vehicle, even if you are at fault.
Comprehensive Insurance
Comprehensive insurance is another optional coverage that protects your vehicle from a wide range of risks, including:
- Theft
- Hail
- Vandalism
- Fires
- Collisions between animals
- Other non-driving-related injuries
If you use your truck or van for business purposes, such as selling coffee or transporting equipment, it can be disastrous if you hit a deer or someone steals your vehicle and you’re not covered.
If necessary, this policy will cover the cost of repairs and/or replacements.
Insurance for Specific Perils
As the name implies, specified perils coverage protects you against specific events (perils) outlined in your policy.
It is critical that you read your policy thoroughly so that you understand what is and is not covered by specified perils insurance in the event that the vehicle you use for business purposes is damaged. This coverage will typically cover damage caused by:
- Fire
- Hail
- Lightening
- Theft
- Earthquakes
- Floods
Insurance for Loss of Use
If your vehicle is involved in an accident or suffers other damage, it must be repaired as soon as possible.
However, you may be concerned that you will be unable to continue your business operations while your vehicle is out of commission.
Loss of use insurance, also known as SEF 20 on your policy, covers reasonable expenses for a rental car or other mode of transportation while your vehicle is being repaired. Essentially, your insurer will pay for you to rent a vehicle similar to the one being repaired, up to the coverage limits stated on your policy. Keep in mind that if your vehicle is specifically tailored to your needs, such as a food truck, renting a van may not be an option.
Insurance for Rental Cars
This optional coverage extends the physical damage coverage you already have on your vehicle to a rental car you use while traveling for business. It’s also known as hired and non-owned auto coverage, and it can be used to cover vehicles that your company uses but does not own, such as employee-owned vehicles used for business purposes and vehicles leased by your company.
The same physical damage deductibles that apply to your current vehicle apply to the rental vehicle. If you or your employees use personal vehicles for business purposes on a regular basis, you should consider Hired and Non-Owned Auto Coverage. It’s critical to speak with a qualified insurance agent at Krywolt Insurance to determine whether or not this add-on is right for you.
Forgiveness for Mishaps
This endorsement is ideal for shielding drivers from the consequences of their first car accident.
Accidents happen even if you are a defensive driver with a clean driving record. Insurance companies created the accident forgiveness endorsement based on this line of thought.
If you are involved in an accident, this coverage will act as if it never happened. Essentially, it provides a second chance—rather than facing the negative consequences of being in an accident and seeing your insurance premiums skyrocket.
