Business auto liability insurance is an important safeguard for your business. If you or an employee is sued following a serious accident, liability insurance helps protect your company’s assets.
Commercial auto liability is required in most states
Business auto liability insurance helps cover the financial responsibility if you or an employee is at fault in an accident and people are injured or property is damaged. A minimum amount of commercial auto liability insurance (or proof of financial responsibility) is required in most states.
Some states also require underinsured motorist and uninsured motorist coverage to protect you when the at-fault driver is unable to pay the total cost. Collision or comprehensive insurance is often optional.
Who needs commercial auto liability insurance?
You need this protection if:
- Your business owns, leases or rents vehicles
- Employees drive company-owned, leased or rented vehicles
- Employees drive their own vehicles while conducting business
- You or your employees drive company cars for both business and personal use
Is minimum commercial auto liability coverage enough?
Minimum required coverage varies by state, and typically is the same for both personal and commercial auto liability policies. Many companies opt for more than state-minimum coverage. The reason? If an injured party sues for a larger amount than is covered by a minimal policy, it could seriously threaten many small businesses.
Protect all of your assets with business auto liability insurance
There are no clear rules for determining how much business auto coverage you need. Nationwide requires at least $100,000 commercial auto liability coverage per vehicle, with a recommended minimum of $500,000 up to a maximum of $1 million.
For even more coverage, consider a business commercial umbrella policy. It picks up where your business auto liability, general business liability or other liability coverage stops. Commercial umbrella insurance is an inexpensive way to provide extra coverage against bodily injury and/or property damage.
For example, if your current commercial truck liability insurance policy covers you for $1 million and you are successfully sued for $1.5 million, your commercial umbrella coverage can pay the outstanding $500,000.