Commercial Auto Insurance is a key coverage that is required in most states for any company that owns vehicles titled under its name. If your consulting company owns vehicles or allows employees to drive personal or rented vehicles for work purposes, it’s crucial to make sure that you have the right insurance coverage to protect your company in the event of an accident. Car collisions are common, and the associated costs are significant and constantly rising. Injuries can cause lasting damage that requires expensive, ongoing medical care, and new vehicles often have complex mechanical and electronic systems that are costly to repair. If you or one of your employees causes an accident that injures someone else or damages others’ property, you could be obligated to pay a large settlement. Commercial Auto Insurance can provide financial assistance that will help your consulting company handle auto-related claims without having a negative impact on your finances.

What is Commercial Auto Insurance for consultants?

Commercial Auto Insurance provides financial protection for your business in the case of accidents involving vehicles owned by your company. If a vehicle belonging to your company is involved in a collision and its driver is at fault, Commercial Auto Insurance will pay for any third-party bodily injury or property damage that results. In addition, Commercial Auto Insurance will provide coverage if your vehicles are lost due to theft or physically damaged by fire, vandalism, collisions, or other common perils.

Example:

• While driving to a client’s offices, one of your management consultants makes a left turn after the light turns red and collides with an oncoming vehicle. The driver of the other car suffers a concussion and a broken collarbone. Your insurer would pay for damages to both vehicles as well as medical expenses and lost income for the injured driver.

Who needs Commercial Auto Insurance?

Any company that owns or leases vehicles needs Commercial Auto Insurance, since vehicles are required by most states to have a minimum level of liability coverage. If your company vehicle is involved in a car accident that injures someone else, your company could be held liable, and the costs associated with lawsuits, settlements, and medical expenses can be extremely high. If you own a small, independent consultancy, the legal costs and settlements of a major auto claim could be severe enough to put you out of business.

Insurance companies are able to accommodate a wide variety of vehicle ownership situations, whether your company owns a single car or a fleet of many vehicles. Insurers will cover many types of vehicles, but consulting companies are only likely to require coverage for passenger cars or SUVs.

What does Commercial Auto Insurance for consultants cover?

Commercial Auto Insurance includes liability coverage, which protects your company if it’s at fault in an accident that causes bodily injury or property damage, and property coverage, which protects the value of the vehicle itself.

Commercial Auto Liability Coverage

If a covered auto causes bodily injury, property damage, or the release of pollutants that must be cleaned up, the liability coverage portion of Commercial Auto Insurance will cover it. Some insurance policies will have separate limits for bodily injury and property damage, while others have combined single limit (CSL) liability, which gives a single limit for all coverage.

Bodily Injury Liability. Your bodily injury liability will cover any injuries to third parties that occur when the driver of a covered vehicle is at fault in an accident. Passengers in the vehicle, occupants of other vehicles, and pedestrians would all be covered if they are injured. Your insurer would provide funds for medical bills, legal fees, lost income, pain and suffering, and funeral costs.

Example:

• An employee with your financial consulting company makes a right turn without noticing that a pedestrian has stepped into the crosswalk. The pedestrian is knocked down and suffers a broken elbow. Your insurer would cover medical costs and lost income.

Property Damage Liability. If you or your employee damages another person’s property while driving a company car, property damage liability would provide coverage. This could include other vehicles and property such as fences or walls.

Example:

• While on-site at a client’s office, your IT consulting company’s employee accidentally reverses a company car into the client’s office building, damaging a structural wall. Your insurer would pay for the wall to be repaired.

Pollution Cleanup. If an accident that causes property damage or bodily injury also causes pollutants to be released, your insurer will pay for cleanup costs. This covers situations where the covered vehicle leaks pollutants that are part of its normal operation, such as motor oil, gasoline, or coolant. Pollution cleanup coverage can also apply in situations where a covered vehicle causes pollutants to be released by damaging, overturning, or upsetting a container holding pollutants.

Example:

• One of your educational consulting company’s employees accidentally drives into a support pillar on a client’s property. The collision causes the car to leak oil. Your insurer would pay for the oil to be cleaned up.

Commercial Auto Physical Damage

Commercial auto physical damage coverage protects the value of your vehicle if it is damaged or stolen. This coverage is divided into collision, comprehensive, and specified causes of loss.

Collision. Collision coverage will pay for damages if your company’s vehicle is damaged in a collision with another vehicle or object, or if it is overturned. Collisions with stationary objects such as fences, walls, or trees are covered as well as collisions with other vehicles.

Comprehensive Coverage. Comprehensive coverage will provide funds if your vehicle is damaged by a risk other than a collision. If your car is stolen, vandalized, or damaged by a fire, flood, or falling object, this coverage would pay for damages.

Specified Causes of Loss Coverage. Specified causes of loss coverage is an alternative to comprehensive coverage that covers a more limited range of situations. Rather than covering most causes of loss, it only covers specific risks named in the contract. This type of coverage is typically less expensive than comprehensive coverage since it provides a more restricted range of coverage. Covered causes of loss typically include:

• Theft
• Fire, lightning, or explosion
• Windstorm, hail, or earthquake
• Flood
• Mischief or vandalism
• The sinking, burning, collision, or derailment of any vehicle transporting the covered vehicle

Uninsured and Underinsured Motorist Coverage

Uninsured and underinsured motorist coverage is required in many states and can provide valuable protection for your company if one of your employees is involved in an accident with an underinsured or uninsured motorist. This coverage can be added as an endorsement on your Commercial Auto Insurance policy.

Uninsured motorist coverage protects the driver of your company car if an uninsured motorist causes an accident. Although auto insurance is usually required by law, some people will not purchase coverage, and they may not be able to pay for any injuries to the occupants of your vehicle that result from the crash. In this situation, uninsured motorist coverage would step in to provide coverage.

Underinsured motorist coverage protects you if another driver is at fault in a collision with your employee, but the resulting medical expenses are greater than the liability limit of the at-fault driver’s insurance policy. Many drivers purchase the minimum amount of insurance required by law in their state. If your employee suffers serious injuries, this may not be enough to cover their medical costs. Underinsured motorist coverage would step in to cover the difference.

Example:

• One of your cybersecurity consulting company’s employees is driving a company car to a client’s offices for a meeting when another car hydroplanes and collides with your employee’s vehicle. Your employee suffers a concussion and broken ribs, requiring an ambulance and medical treatment. The other driver’s insurance has a limit of $20,000 per person for bodily injury, but your employee’s medical costs are $32,000. Underinsured motorist coverage will pay for the remaining $12,000.

What are the key exclusions to Commercial Auto Insurance?

Commercial Auto Insurance covers most instances of bodily injury or property damage, but there are a number of key exclusions.

Common exclusions to liability coverage include:

• Expected or intended injury
• Pollution
• Racing
• War, insurrection, or rebellion

Excluded causes of loss for physical damage coverage include:

• War or military action
• Nuclear hazard
• Racing, demolition contest, or stunting activity
• Wear and tear, freezing, mechanical or electrical breakdown
• Blowouts, punctures, or other road damage to tires
• Diminution in value

What is hired and non-owned auto insurance?

Hired and non-owned auto insurance provides coverage for incidents where you or your employees are driving for business purposes but their vehicle is not owned by your company. If your employees are at fault in an accident while they are driving their personal car or a rented car for work purposes, this coverage would kick in. This is an important type of coverage to consider for consulting companies, since your employees may drive their own cars to visit clients or rent cars while on business trips. If your employee causes an accident, their personal insurance may not be sufficient to cover a large claim, and your company could be held liable if the employee was driving as part of their job.

It’s important to note that this coverage only applies to third-party property damage and bodily injury. Injuries to the employee would be covered by workers’ compensation insurance, the medical payments portion of personal auto insurance, or personal health insurance. Damage to the employee’s car would be covered by the employee’s personal auto policy.

If your company has Commercial Auto Insurance, hired and non-owned auto insurance can commonly be added as an endorsement to your policy. If your company does not own any vehicles and does not need Commercial Auto Insurance but does have employees who drive for work purposes, you can purchase hired and non-owned auto coverage separately or add it as an endorsement on your general liability or business owner’s policy.

Final Word

Commercial Auto Insurance is an important coverage to consider if your company owns or leases vehicles. It is legally required in most states, and it can provide valuable financial protection from the expensive lawsuits and settlements that often result when car accidents cause bodily injury or property damage. As a consulting company, it’s also necessary to ensure that you have coverage if your employees drive their own cars or rented vehicles for work purposes. Hired and non-owned auto coverage can protect you from lawsuits that may result if your employees are at fault in an accident while driving their own car as part of their job. Commercial Auto Insurance is a critical coverage for any company that uses vehicles as part of its work.