State Requirements For Commercial Auto Insurance

Business owners need adequate commercial auto insurance. A key component of this insurance is liability coverage. Liability insurance covers the risk drivers pose to others on the road.

If you or your employee causes an accident, this insurance kicks in. It helps pay for the damage to the other vehicle. It can also cover damage to other property or even other people. It is a key component of your business insurance if you operate a vehicle. But, what are state minimums for it?

What Do States Require?

Nearly all states require businesses to maintain a minimum level of liability insurance. The value of this differs from state to state. However, all commercial drivers will need to have this coverage to operate a vehicle. All private vehicle owners need to have coverage as well. The coverage requirements often include the following:

• Bodily Injury Insurance: This provides protection for injuries caused to a non-employee.
• Property Damage Insurance: This covers damage to another person's property, such as other vehicles.
• Underinsured or Uninsured Driver Insurance: Most states require this coverage as well. It covers your property if another driver causes damage to it and that driver doesn't have insurance.
• Medical Payments: Some states require this coverage. It provides medical coverage for you or your passengers after a wreck.

Remember, this is the minimum amount of required insurance. It is not the recommended amount. Most business owners should increase the amount of liability insurance they carry. A single accident involving a delivery van, for instance, can amount to thousands – if not millions – of dollars in damages. Without proper coverage, your company may face a lawsuit for this type of loss.

Your business insurance agent can likely offer recommendations on how to customize your coverage. The size and type of vehicle can play a role in how much coverage you need. It is also helpful to consider recent accidents. How much were those claims? What is the local average for liability claims? The more information available, the more informed your decision can be. Update your coverage to match these risks.

Liability Is Rarely Enough

States often do not require drivers to maintain property insurance for your vehicles. However, it is an important component to most business owners. Collision coverage and comprehensive coverage extends specialized protections if your vehicles are damaged in accidents, or by fires, storms or vandals. Discuss this type of insurance with your business insurance agent and determine you need more coverage.

If have questions on business insurance coverage, Southwest Commercial Insurance is here to help. Contact us to learn more about the policies we offer.