A Commercial or Business Auto Policy (BAP) is designed to provide auto insurance protection for autos owned by a business and used for the operations of the business. It is usually written as a stand-alone policy but may be included as part of a Commercial Package Policy (CPP). There are many similarities in coverage descriptions to a Personal Auto Policy but that is where the similarity stops. A Personal Auto policy is not designed to protect a business, or vehicles operated by employees, or vehicles with advertising, towing trailers, equipped with special equipment used in business or extend protection to a business entity for the use of “hired” or “non-owned” used for or on behalf of the business.
If you’re wondering whether or not you need a Personal Auto or Commercial Auto Policy you can read more here.
A Business Auto Insurance Policy is designed to protect your business and your employees while operating business owned vehicles. The use of the vehicles can be business only or a combination of business and personal use. To properly protect your business, a BAP can be structured in various ways:
Garage Coverage
For businesses in the “Auto Sales & Service” sector, a BAP can be tailored to protect the unique exposures centered around these services.
Truckers Coverage
This coverage is designed to provide for the operations and protect property of those in the business of transporting goods, materials or commodities for another organization.
A BAP can be structured to cover a broad or very narrow range of exposures depending on the needs of the business and choices of the named insured.
Coverage can be automatically extended to protect certain owned trailers, mobile equipment and even temporary substitute vehicles.
Under a BAP there are generally three categories of those who are protected:
- Named Insured and listed operators – These have the broadest range of coverage and are granted liability protection based on the policy.
- Permissive users – This is very restrictive under the BAP, A good rule to follow is that all operators of business owned vehicles must be listed on the policy.
- Those held vicariously liable – A vicarious insured is one who is held liable for the conduct of an “insured”. For example, a company that has been hired by the named insured to temporarily provide services on their behalf.
The pressures of protecting your business as well as the source of many employees and coworkers livelihood, forces the consideration of proper liability coverage. Liability limits as well as excess liability (or an umbrella) should be considered to ensure assistance when a financial crisis arises. The size of the vehicles also may require increased coverage. Federal Regulations and many States where the vehicles may travel could require special limits and filings be made in order to allow operation on their roads. This is typically based upon Gross Vehicle Weight (GVW) of the vehicle and any attached trailer and goods being transported.
Physical Damage to Vehicles
Physical Damage in a BAP is similar to a Personal policy form in that it provides for coverage to the listed vehicles. Coverage can be for the vehicle and any added special equipment and is dependent on the original cost new, current value or agreed upon value.
And again, similar to the Personal Auto Policy, actual cash value is typically the basis for coverage unless another value is agreed upon and specified in the policy.
As with almost all insurance, a BAP can be structured in a number of ways with a multitude of options based on your business and how you use your vehicles. We can protect everything from a single car to a fleet of vehicles, and address your specialized needs like cargo coverage or custom attached equipment.
Contact one of our Florida licensed experts today and let us prepare a customized proposal for you. We understand what is needed to properly protect your business so you can focus on what you do best.
