What is Commercial Auto Insurance?

Just as individuals must insure their personal vehicles, businesses that own vehicles generally have to insure their vehicles. WIthout insurance, businesses may face significant legal and/or financial consequences. Commercial auto insurance provides businesses in Massachusetts that have vehicles with the insurance protection they need.

Commercial auto insurance is a specialized form of auto insurance that’s designed for businesses rather than individual drivers. Commercial policies are written to meet the particular insurance needs of businesses, and the policies’ premiums are calculated based on businesses’ exposure to risk (as opposed to individuals’ risk exposure).

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What Coverages Are Included in Business Auto Insurance Policies?

While business auto insurance policies aren’t identical to personal auto policies, many of the coverages found in business policies are similar to those in personal policies. Most business policies offer the following coverages as standard or optional protections:

  • Personal Injury Coverage, which may cover injuries drivers and their passengers sustain
  • Bodily Injury Liability Coverage, which might cover injuries sustained by people outside of company vehicles (e.g. other drivers and pedestrians)
  • Comprehensive Coverage and Collision Coverage, which may cover damage sustained by company vehicles
  • Property Damage Liability Coverage, which might cover damage sustained by other people’s and business’ property while employees are driving
  • Underinsured and Uninsured Motorist Coverage, which may cover collisions caused by drivers who lack sufficient insurance or financial resources 

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Commercial Auto Insurance Massachusetts

What Businesses in Massachusetts Need Business Auto Insurance?

Most businesses in Massachusetts that own vehicles need to carry business auto policies for their vehicles. It’s illegal to drive on public roads in the state without insurance that at least meets the government’s minimum requirements.

A few examples of businesses that may need to purchase auto insurance for vehicles they own include:

  • Courier and delivery services
  • Taxicab and limousine companies
  • Snow plowers and landscapers
  • Contractors and appliance repair companies
  • Colleges and universities
  • Tow truck drivers
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What is Hired and Non-Owned Liability Coverage?

Hired and non-owned liability coverage is one of the coverages that are widely available through business auto policies but generally not found in personal policies.

This coverage normally provides liability protection for vehicles that are used in the course of business but the company doesn’t own. It’s often used when a rented, leased or employee vehicle is driven for work purposes. Some businesses that may need this coverage are:

  • Restaurants and pizzerias that offer delivery
  • Trucking companies that rent replacement vehicles when a truck breaks down
  • Companies that rent cars for traveling employees

How Many Vehicles Do Business Auto Policies Cover?

Business auto policies can be written to cover almost any number of vehicles. Some policies cover just one or two vehicles, while others cover multiple large fleets.

Commercial Auto Insurance Massachusetts

Are Business Auto Policies Expensive?

Like personal auto policies, business auto policies range in price. The size of a company's fleet, where the company’s vehicles are parked when not in use, the company’s past claims history, the limits chosen and many other factors impact a policy’s premiums.

While business auto policies vary in cost, most are quite affordable. They’re certainly more affordable than having a major claim to settle and no coverage.

How Can Massachusetts Businesses Get Commercial Auto Insurance?

For help finding commercial auto insurance, businesses in Massachusetts should get in touch with an independent insurance agent in the state who specializes in commercial coverages. An independent agent can help a business select the coverages it needs and then request quotes for policies that offer those coverages from different insurers.

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