If you operate a business in which trucks, vans, cars, or other motor vehicles are necessary, you need commercial auto insurance. A challenge to this type of coverage, however, is that you have several different options to choose from. Below, we will explain the different types of commercial auto insurance and what types your business should have.
Types of Commercial Auto Insurance
Personal Injury Coverage (PIP) or "No-Fault" Coverage
This type of coverage will pay for the medical expenses of your drivers and/or passengers if they are injured as the result of a covered accident. Who was at-fault in the accident does not matter. Some states — including Oregon — require this policy from all drivers, commercial drivers included.
Property Damage Liability (PDL) Coverage
This is generally a required type of insurance. All states have different auto insurance requirements, and property damage liability is typically one type that is needed in all states.
If one of your drivers causes an accident with someone else, this type of coverage will pay for the property damages of the other party.
Bodily Injury Liability (BIL) Coverage
Bodily injury liability coverage is also typically a required type of coverage, according to most state laws. If one of your drivers causes an accident that impacts someone else, this type of coverage will pay for any bodily injuries (medical expenses) that were incurred by the other driver and passengers.
Uninsured/Underinsured Motorist (UM/UIM) Coverage
Some motorists on the road don't have the proper liability coverage — or none at all. If one of your drivers were to get into an accident with them, the other party's insurance (or lack thereof) would be unable to pay. UM/UIM coverage protects you from this.
Collision Coverage
This type of coverage takes care of damages to the policyholder's vehicle that occur as a result of a covered collision (being hit or hitting another object).
Comprehensive Physical Damage Coverage
Lastly, comprehensive physical damage coverage will cover damages caused to your cars or trucks in the event that they are involved in a flood or fire. It also applies if they are vandalized or involved in other perilous situations not related to collisions.
From small businesses to large enterprises, any company that includes driving as part of their operation must have coverage for those employees doing the driving.
Remember that you must always have at least the state-required amount of liability insurance for your company's vehicles, but you should also consider the other types of coverage — especially medical payments, comprehensive, and collision coverage.
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