The Important Details of Your Commercial Auto Insurance Policy

Running a business in the current age is not easy and choosing the right type of insurance for your business can be complicated without proper research. When purchasing business insurance, ensure you have proper coverage for the autos used in daily business operations. A commercial auto policy varies from a personal auto policy in that it covers commercial use of automobiles. Commercial auto insurance is designed to help you in your time of need. It is crucial to understand the various policy components and available coverage.

Coverage Explained

The vehicles covered by a business auto insurance policy are those owned, hired, leased or borrowed by a business and designed to be driven on public roads. You can opt for the broadest coverage available protecting any auto, cover owned, hired, and non-owned autos, or only cover autos specifically described on the policy declarations page.

A covered driver on an auto insurance policy for business owners can be the owner himself or his employees. A covered driver is the business owner himself or anyone that is driving a covered vehicle with the permission of the named insured. The coverage does not apply to a person who is selling, serving, repairing, or parking autos, unless this is the business of the insured.

Liability Coverage

Liability coverage pays for the business owner’s legal obligation for damages caused to others by a covered accident that results in bodily injury or property damage. Insurers defend the insured legally against lawsuits and claims up to the policy limits.

Physical Damage Coverage

Physical damage may be added to the policy, which covers damage to the insured’s autos as the result of a covered risk in the policy. A collision is when a covered auto is hit by another vehicle or object. Comprehensive can loosely be defined as anything other than a collision. Some examples of a comprehensive coverage claim would be for damage caused by fire, wind, hail, vandalism, or theft.


The “conditions” of the policy list the legal responsibilities of the insured and the insurance company. In the conditions section of the policy, there is information about obligations for paying the insurance premium, how to file a claim and procedures for resolving disputes.


The definitions section of the business owner insurance policy is where the policyholder can find the so-called “fine print” of the policy, explaining policyholder rights and the common words used within the policy are defined. It is important to understand the definitions as some of the words used within the policy may restrict or limit coverage.

A New Jersey commercial auto insurance agent can explain in more detail which coverage options are mandatory and which ones are optional and help design a business insurance auto policy that is right for your unique business situation.