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Risk management should be a priority for every business. As the experts at IBM explain, “Risk management is the process of identifying, assessing, and controlling financial, legal, strategic, and security risks to an organization’s capital and earnings.” A strategic approach to reducing risks is essential for the long-term success of your company.

And while risk management is important for every organization, it’s especially crucial for a business that involves the transport and delivery of people or goods. With the risk of accidents, theft, and damage comes the need for comprehensive commercial auto insurance.

Read on to learn more about how you can manage risk with the right commercial automobile insurance.

How Auto Insurance Supports Risk Management

Commercial auto insurance can do more than just protect your finances from accidents and property damage (though that’s a major part of it). Let’s take a closer look at how commercial automobile insurance can help businesses with risk management.

Financial Protection

Of course, one of the major benefits of commercial car insurance is protecting your finances. Business vehicles are a major investment for your business, so you want to ensure that if there is any damage to your vehicle it will be covered.

And while car accidents are often top of mind, it’s also important to understand how injuries and property damage can also occur at the same time. The right commercial auto insurance provides financial protection against potential accidents and can protect your business from financial losses associated with liability claims, repairs, and more.

What Does Commercial Automobile Liability Insurance Cover?

As we said, commercial auto liability insurance covers more than accidents and property damage. A holistic coverage plan should also help protect your business from:

  • Bodily injury and property damage to others
  • Medical payments
  • Physical damage, fire, theft, or vandalism to a vehicle
  • Uninsured and underinsured drivers


The right auto insurance also ensures your business remains compliant with local jurisdictions and avoids costly penalties and fines. explains that commercial auto insurance requirements vary by state, but nearly every state requires businesses to have at least some level of liability coverage for their vehicles. The current exceptions are New Hampshire and Virginia.

Some states base commercial automobile insurance requirements on the types of materials being transported while others are contingent on the number of passengers and weight of the vehicle. Always check with your state requirements to ensure your coverage compliest with the minimum amounts of coverage.

Claims Management

While the priority of risk management is to be proactive about preventing accidents from happening, not all things can be avoided. That’s why another essential component of risk management is to control the impact of negative effects.

That’s where commercial auto insurance comes in. If an accident or damage to your property does occur, your insurance provider should be able to assist you with the claims process. This can range from the initial investigation and communication with authorities to guidance on your coverage and liability.

As you can see, commercial auto insurance is an important component of a holistic risk management strategy for businesses that own or lease vehicles.

Smiling delivery driver taking packages from commercial vehicle

Best Practices for Managing Risks with Commercial Automobile Insurance

Managing risk with commercial auto insurance is always ongoing. Here are some ways you can ensure your business is prioritizing safety and risk management with the right insurance coverage:

  • Establish clear safety policies and procedures: After identifying potential risks to your business, take steps to mitigate them. This can include rules around operating vehicles in dangerous weather, compliance with driving hours to reduce the risk of accidents.
  • Conduct consistent driver training: Driving a vehicle for business purposes is no small responsibility. The Federal Motor Carrier Association provides great guidance for the types of training commercial drivers should undergo and how often.
  • Regularly inspect vehicles: Every vehicle, including commercial ones, needs to undergo regular inspections. Though the frequency varies by state, a regular inspection ensures your business remains compliant and helps keep the roads safe.
  • Document and report accidents right away: When the unexpected does happen, it’s important to document it and report it to your insurance provider right away. Make sure to cooperate with your insurance provider and monitor the claims process.
  • Review your insurance coverage regularly: Finally, you can’t overlook the importance of regularly reviewing and updating your commercial auto insurance as needed. As your fleet of business vehicles grows or you transport other materials, you may need to update your coverage.

Commercial Auto Insurance FAQs

Have more questions about commercial automobile insurance?

Commercial Automobile Insurance Definition

Business auto insurance is a form of auto insurance that’s made for businesses, rather than individuals. Policies are written with the unique risks that businesses face and the coverages they need in mind. It’s essential for protecting your business from costly accidents and property damage that can occur to vehicles.

Who Needs Commercial Automobile Insurance?

Most businesses that own vehicles that are driven on public roads need commercial auto insurance. While many people think of large commercial trucking fleets, businesses of all sizes should consider protecting their:

  • Delivery service vans
  • Taxicab or limo vehicles
  • School buses
  • Landscape vehicles
  • Long and short-haul trucks
  • Restaurants, if your employees deliver food
  • Employees’ vehicles used for your business-related activities

Does Commercial General Liability Insurance Cover Automobile Liability?

According to Investopedia, commercial general liability does not provide protection against intentional damages, or any type of accident involving automobiles, aircraft, or watercraft. That's why it’s important to invest in commercial auto insurance in addition to your general business insurance.

Where Can You Receive a Commercial Automobile Insurance Quote?

Are you ready to receive a commercial automobile insurance quote? The transportation team at World Insurance has more than 50 years of industry experience and they understand your business and level of risk.

We’re happy to provide you with a commercial auto insurance quote with various options so you can choose the plan that is right for you and your budget based on the minimum insurance requirements for your state.

Get a commercial automobile insurance quote today.


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