Commercial auto insurance: Why you need it and what it covers

Whether you’re a florist, a restaurant owner, a contractor, or another type of entrepreneur, you’ve likely heard the term “commercial auto insurance” thrown around a lot in relation to your business. But, with so many other daily expenses, you may be wondering, “Is this something I really need?” The short answer is yes.

To better help you understand why commercial auto insurance is so important, we spoke with Michael Hill, executive underwriter at TruShield Insurance, to find out how this particular coverage can help protect you, your employees, and your business.

1. Do business owners really need commercial auto insurance?

If you own a business that requires the use of a vehicle, that vehicle will require commercial auto insurance. For instance, if you own a bakery and frequently use your vehicle for deliveries after work, that counts as commercial purposes, and a commercial auto policy would be required.

2. What kinds of things does commercial auto insurance cover?

While types of insurance will vary by province, the primary coverages for provinces that do not have a government insurance plan (British Columbia, Manitoba, and Saskatchewan) are as follows:

• Liability: This coverage protects you if someone else is killed or injured, or their property is damaged. It will pay for claims as a result of lawsuits against you up to the limit of your coverage, and will pay the costs of settling the claims. By law you must carry a minimum limit for Third-Party Liability coverage (varies by province) but options exist to increase the minimum amount.
• Accident Benefits: This coverage provides you or other insured persons with benefits if you are injured in an automobile accident, regardless of who is responsible for the accident.  It covers things like rehabilitation treatment, income replacement, and other services that are needed for recovery.
• Loss or Damage: This provides a selection of coverages for your automobile that covers you against direct and accidental loss of, or damage to, your automobile and its equipment.

There are four optional coverages:

• All Perils: Combines the Collision or Upset and Comprehensive coverages listed below.
• Collision or Upset: Covers damage when your vehicle is involved in a collision with another object, including another vehicle, or tips over.
• Specified Perils: Covers your vehicle against loss or damage caused by certain perils, including fire; theft or attempted theft; lightning; windstorm; hail or rising water; or earthquake.
• Comprehensive: Covers your vehicle against loss or damage caused in addition to those covered by Specified Perils, as well as falling or flying objects, missiles, and vandalism.

3. What affects the cost of a commercial auto insurance policy?

There are a number of factors that can affect the overall cost of commercial auto insurance. Some of these factors would include the vehicle year, make, and model, the location of your business, the coverages and the deductibles that you select, and your auto claims experience.

Ensure you’re covered with TruShield

Still interested in learning more about commercial auto insurance? Visit our commercial auto page.

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. Terms, conditions, and exclusions apply, see policy for details.