No matter how careful you are when it comes to operating your business, the reality is there’s still a high probability of facing a lawsuit at some point during your business tenure. And even a minor mishap could lead to severe financial strain that could force you to close indefinitely. For this reason, it is imperative to understand exactly what insurance coverage your business needs to stay protected. If you’re wondering whether commercial liability insurance covers automobile insurance, or how much commercial auto insurance costs on average, we can help.
Let’s dive into all these details and more below.
Why is Commercial Liability Insurance so Important for Businesses?
If something happens that leads to an injury or losses for a customer or client, you could be held liable. This can include incidents that occur on your commercial property, at another location that involves some aspect of your business, property damage caused by an employee, and more. Therefore, commercial liability insurance is the most important coverage to have for protecting your business.
What Does Commercial Liability Insurance Cover?
If your business gets sued and you’re faced with a legal battle, this coverage will kick in and pay for the associated costs. This includes court-awarded damages, an out-of-court settlement, and any other related legal fees, even if you don’t have to go to court.
More specifically, CGL will cover settlements for property damage caused by an employee, copyright breaches, injuries to a third party, and even reputational damage caused by your company. What it won’t typically cover are lawsuits filed from one of your employees. This is where WSIB would step in. Also, if your business sells and distributes products, you will need additional coverage for that, referred to as product liability insurance.
What About Commercial Auto Insurance?
Commercial liability insurance will not cover any injuries for damages caused by an automotive accident by an employee or other member of your business. So if you have any vehicles that are used for business related purposes, you’ll need to purchase separate commercial auto insurance. Personal auto insurance won’t cover any liabilities associated with your commercial vehicles.
Additionally, similar to a personal insurance auto policy, there are various components that you must have by law. These include accident benefits, third party liability, direct compensation property damage, and uninsured automobile coverage. Some additional coverages might be needed on top of this if your business uses speciality equipment or trailers.
All in all, you should have commercial auto insurance if your business uses vehicles for:
- Delivering materials or products
- Transporting equipment
- Transporting passengers
How Much Does Commercial Auto Insurance Cost?
This will vary depending on a variety of factors. But since commercial vehicles are viewed as riskier than personal vehicles, you should expect to pay more than your existing personal auto insurance policy.
Tips to Save on Commercial Auto Insurance
There are several steps that your business can take to save and get the lowest rate possible. These include the following:
- Permit employees to use their own vehicle and reimburse them for it. This can prevent you from having to purchase additional vehicles for your business.
- Thoroughly screen potential employees before hiring them to ensure they have a safe driving record. Their names will be included in your policy, which is why it’s imp