Types of commercial vehicle insurance
When your vehicle is your livelihood, you need every element of protection available. Several different factors will determine what type of commercial vehicle insurance is right for your line of work.
For example, whether you travel over state lines, haul cargo, or tow personal vehicles, you’ll work closely with your insurance agent to adjust your coverage to find the perfect fit for your circumstances. Read on for a detailed explanation of the different types of commercial vehicle insurance coverages you should consider.
Liability insurance is the most basic form of commercial vehicle insurance.
It covers injuries or damage to other people or property if you’re at fault for an accident. It may also cover legal defense costs if you are sued as a result of your involvement in an accident.
Physical damage is a general term for coverage that protects your vehicle. This includes collision insurance, as well as your choice of full comprehensive insurance or fire and theft with combined additional coverage (CAC) insurance.
Collision insurance provides protection for your vehicle if it is damaged in an accident. It can also help cover repairs or replacement of your vehicle if it collides with an object, rolls, or overturns.
Comprehensive insurance, on the other hand, provides protection for your vehicle if it is damaged by something other than a collision or if your vehicle is stolen. Fire and theft with CAC provides similar protection to that comprehensive insurance, but coverage is limited to certain specific, non-collision incidents.
Medical payments insurance, or MedPay
Medical payments coverage, also known as MedPay coverage, is designed to provide coverage for medical expenses after an incident.
This may be for you, and passengers in your vehicle, who are injured during an accident, regardless of who caused it.
Uninsured motorist insurance can protect your business if your driver is involved in an accident with someone who does not have liability insurance or does not have enough liability insurance to pay for associated damages.
Depending on the state, uninsured motorist insurance may be three separate insurance coverages that are typically bundled together into one. These may include:
- Uninsured motorist insurance (UM or UMBI)
- Underinsured motorist insurance (UIM)
- Uninsured motorist property damage insurance (UMPD)
Covered expenses for you and your passengers could include medical bills, lost wages, and pain and suffering.
If you have a trailer interchange agreement, you generally need trailer interchange insurance. Since exchanged trailers are not owned by you, they require separate insurance coverage because they are not covered under regular physical damage insurance.
This insurance protects you if the trailer is damaged by collision, fire, theft, explosion, or vandalism.
When you’re under permanent lease to a motor carrier, and you’re not driving under dispatch, non-trucking liability insurance provides the truck insurance coverage you need at an unlimited radius.
Non-trucking liability insurance can also pay for medical and associated expenses for injuries or even death that you cause to other people or for any damage caused to other peoples’ property.
Motor truck cargo
Motor truck cargo, more simply known as cargo insurance, provides insurance on cargo that is lost or damaged due to fire, collision, or striking of a load.
For example, if your load is accidentally dumped on a roadway or waterway, removal expenses coverage pays for the cost to remove debris or extract pollutants caused by the debris. This may also include coverage for costs related to:
- Preventing further loss
- Legal expenses in the defense or settlement of claims
- Freight charges
Motor truck general liability
Motor truck general liability coverage pays for injuries or property damage you cause as a result of business activities that are not directly related to operating your truck.
For example, this may include:
- Slip and fall incidents
- Erroneous delivery of products that results in damage of some kind
- Actions of a driver while representing the insured and on the premises of others (such as while loading docks or at truck stops)
- Libel and slander
- Fire on rental property due to insured’s error
On-hook towing insurance can help pay to repair or replace a vehicle you don’t own if it is damaged by a collision, fire, theft, explosion, or vandalism while you are towing or hauling it.
Do note that in Texas and Virginia, on-hook towing insurance is called garagekeepers legal liability insurance. In these two states, what is actually garagekeepers legal liability insurance (and we’ll explore next) is called storage location insurance.
Garagekeepers legal liability
Garagekeepers legal liability coverage is optional coverage for business owners who offer towing services or operate service stations. It protects your customer’s vehicles when you are keeping them at a covered location for parking, storing, or to perform service.
Garagekeepers legal liability insurance generally provides protection in cases when a vehicle is damaged by fire, theft, vandalism, or collision.
As noted, in Texas and Virginia, garagekeepers legal liability coverage is called storage location insurance.
Workers’ compensation insurance is a mandatory type of insurance carried by many types of businesses. It’s an important type of coverage that can help cover medical costs and a portion of lost wages for an employee who becomes injured or ill on the job.
Workers’ compensation benefits don’t end there. It also protects companies from being sued by employees for workplace conditions that can cause an injury or illness.