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Consulting About Business Insurance Coverage

If your clients already have a commercial auto insurance policy with you, they may think that is all the coverage they need. This isn’t always true, though — especially for companies with unique needs.

Commercial auto insurance has a limited amount of coverage. A basic policy covers vehicles owned or used by the company, but it doesn't always cover personal vehicles used by employees. There are also some commercial vehicles that need specialized coverage.

Hired and Non-Owned Auto Insurance

Hired and non-owned auto insurance is for companies that rent vehicles or have employees use personal vehicles for work purposes. The issues with borrowing or renting vehicles are that they leaves the employer at risk for liability if the driver causes an accident. Hired and non-owned vehicle insurance covers medical bills and property damage for such vehicles.

Additional Insured

Clients may choose to have only named insureds for work vehicles or purchase additional insured to protect anyone driving the company vehicles. This coverage is more limited for drivers than it is for the insured. It helps cover legal fees and third-party lawsuits concerning bodily injuries and property damage.

Trucking Insurance

One side of commercial auto insurance is trucking insurance. This insurance is geared specifically for truckers and trucking companies, as these vehicles face unique risks and tend to cost more to repair. It covers the same auto coverages as commercial auto insurance but also involves:

  • Cargo Insurance: Cargo insurance provides compensation when cargo is lost or damaged.
  • Warehouse Legal: This insurance helps pay for items kept in a warehouse that are damaged or lost due to theft, fire and other covered incidents.
  • Non-Owned Trailer Coverage: Non-owned trailer coverage provides compensation if a rented or borrowed trailer is damaged or lost.

Umbrella Insurance

Umbrella insurance is additional coverage that fills in holes left over by other liability coverages. If an accident happens and costs more than your client's policy limits, umbrella insurance will help pay for the extra damages. This policy must be purchased along with or after another policy.

Offering Discounts For Commercial Auto Insurance

Commercial auto insurance can be expensive, especially for large businesses or businesses with vehicles that travel across states. Consider offering discounts or finding discounts for your commercial auto insurance clients. Common discounts include:

  • Paid-In-Full Discounts: If the client pays their entire premium in one lump sum, they can receive a discount.
  • Experienced Commercial Driver Discounts: Some agencies offer discounts for drivers who have been driving for a certain amount of time.
  • Multi-Policy Discounts: It's a good idea to offer discounts to clients who have multiple policies with your insurance agency.
  • CDL Discounts: CDL discounts, or commercial driver's license discounts, save money for clients that have a commercial driver's license.

Also inform clients about Specified Perils Coverage, which may save them on premiums by covering only named incidents instead of named and unnamed incidents.

Be sure to speak with your client about who is covered beneath their policy and how much coverage their business needs. Some states require companies to carry commercial business insurance. In Texas, businesses that use trucks for work require:

  • $300,000-$500,000 in liability insurance
  • $750,000 in liability insurance for trucks over 10,001 lbs.
  • $5,000,000 in liability insurance for trucks over 10,001 lbs. that carry hazardous materials.
  • $5,000,000 in liability insurance for interstate passenger vehicles carrying 16 or more people.
  • $1,500,000 in liability insurance for interstate passenger vehicles carrying 15 or less people.

Commercial auto insurance can often be sold as a combined single limit (CSL) which combines bodily injury and property damage to raise the limits on these coverages.

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