Whenever a business expands its fleet of vehicles, all of the business commercial auto insurance coverages should be reviewed to make sure they’re still adequate. There are some particular coverages, however, that should receive special consideration. If your business recently purchased new vehicles, make sure you discuss the following coverages with an insurance agent.
When Expanding Your Fleet – Consider these Commercial Auto Insurance Coverage Updates
Comprehensive and Collision Limits
Adding vehicles to your business’ fleet increases the value of the cars and trucks that the business owns. The comprehensive and collision limits in your business’ commercial auto insurance policy probably should be updated to reflect the fleet’s increased value.
Comprehensive and collision coverages generally insure company-owned vehicles against various sources of damage. Their limits are normally should be equal to the value of a company’s insured vehicles, so the limits likely need to be increased since the fleet’s value has increased.
(If your business has leased or financed the new vehicles, you may be required to increase the comprehensive and collision limits in your business’ commercial auto policy. Many leases and loans require vehicle owners -- including businesses that own vehicles -- to carry insurance that’s at least equal to the leased or financed vehicles’ value.)
Bodily Injury and Property Damage Liability Limits
You may also want to increase the bodily injury liability and property damage liability limits in your business’ business auto insurance policy. These coverages normally protect your business from potential liability lawsuits if an employee causes an accident.
Specifically, you may want to look at the aggregate limit of each coverage. Most business auto insurance policies have both per-occurrence and aggregate limits for these coverages. Per-occurrence limits usually dictate how much a policy will pay for claims arising from a single accident, and aggregate limits typically determine how much a policy will pay over the life of the policy.
The potential cost of a single accident doesn’t necessarily go up when your business purchases additional vehicles, so you might not need to increase any per-occurrence limits. The likelihood of having multiple accidents occur during a single policy’s effective period, however, does go up when more company vehicles are on the road. Thus, you may want to increase the aggregate limits for these coverages in case several drivers are in accidents over a relatively short period of time.
Limits for Products or Equipment in Vehicles
If your business keeps products or equipment in company vehicles, make sure the coverage offered for these items is still sufficient. With more vehicles on the road, your business will likely have more products and/or equipment to insure. Even if the items themselves aren’t too expensive, their cumulative value can become substantial when adding a lot of new vehicles to a fleet.
Should your business need more coverage for products and/or equipment, there may be a couple of ways to procure additional protection. Sometimes it’s possible to increase the limits of an existing business auto insurance policy, and you can almost always get a new business auto insurance policy that has different coverages and limits if necessary. Alternatively, an inland marine insurance policy might offer complementary coverage for items at an affordable price. A knowledgeable insurance agent can help you evaluate the options that are available.
Review All Commercial Auto Insurance Coverages with an Agent
While you probably want to pay particular attention to these protections, you really ought to review all your business’ commercial auto insurance coverages when purchasing new vehicles. For help reviewing your business’ current coverages and making adjustments if necessary, contact the independent insurance agents at World Insurance Associates. Our experienced team has the expertise needed to make informed recommendations and the independence required to help you compare insurance options from multiple companies.