Commercial Auto Insurance - Summit Cover

October 24, 2023

Transportation is the heartbeat of all businesses in the world. Vehicles are important for any business, be it a small local or big multinational corporation, in facilitating the smooth movement of goods and services. The other side of the spectrum is that it is an essential aspect of a business but has drawbacks. Your assets and finances could be ruined due to accidents, pilferage or any unforeseeable circumstance. In this blog post, we will discuss Commercial auto insurance and its Essentials!

What is Commercial Auto Insurance?

It is a type of insurance product tailored for particular businesses; it shields organizations and their vehicles when accidents, damages, theft or other covered perils incur losses. This policy is for vehicles like 

  • private passenger automobiles
  • small trucks
  • vans 
  • other speciality vehicles

This type of policy offers essential safety measures for businesses that depend on motor vehicles to conduct their ordinary activities. If you run a cannabis transportation business, you should check out our blog post on cannabis transportation insurance!

Importance of Auto Commercial Insurance

Commercial auto insurance is essential for several reasons:

Legal Requirement

It is required in many jurisdictions, including Canada, for vehicles used for business purposes. Ignoring this legal requirement may attract severe penalties, including hefty fines.

Financial Protection

The financial consequences of accidents of this nature can lead to substantial financial losses involving vehicles. This policy helps pay for 

  • repairs of a car
  • medical bills
  • liability claims

Asset Protection

Vehicles are an integral part of any business. With this policy, you can protect your investment by minimising the cost of damage to your vehicles, reducing the financial burden in case of an accident.

Liability Coverage

It also covers third-party liability claims that may arise when your vehicles are involved in accidents causing injury or property damages to others. Such lawsuits without any coverage could bankrupt a person.

Also, read out our blog post on business insurance for transportation!

Commercial Auto Insurance Canada

As in many other countries, Canadian companies need commercial auto insurance for vehicles used for commercial purposes. It may be helpful to find out if any specific regulations may apply or if coverage is required in each province and territory of Canada – before starting to operate. It typically covers the following aspects:

  • Liability Coverage: This rule prevails in almost all provinces and territories. This is for the cost caused by accidents involving your vehicles and injuries or damages caused to a third party or their property.
  • Accident Benefits Coverage: It covers expenses for medical benefits, rehabilitation, and income replacement of employees who suffer injuries.
  • Direct Compensation - Property Damage (DC-PD): Ontario has exceptional coverage for only the province that provides compensation in case another carrier is responsible for the car accident.
  • Uninsured Motorist Coverage: This covers you against losses from a collision by an uninsured/underinsured driver.
  • Comprehensive and Collision Coverage: It protects your vehicles from hazards such as theft, vandalism and collisions.

The Best Commercial Auto Insurance

Decision-making in Choosing the Best Policy for Your Business is a critical task. Here are some factors to consider when making this choice:

Business Size and Nature: How much coverage you need depends on what type of company one owns and how big it is. For instance, a small business may need coverage which differs from that required by a large logistics company.

Vehicle Types: The appropriate coverage depends on various factors, including the number of vehicles you have, their usage patterns, and the age of the cars.

Coverage Limits: Based on the value of your vehicle and the potential for legal action, the amount of coverage needed can vary.

Deductibles: Before your insurer starts covering you, it's important to make an initial payment. Consider how much you can afford to pay in the event that you need to make a claim. This will help you choose the appropriate coverage for your needs and budget.

Claims History: Having a history of making clean claims can increase the likelihood of being offered better coverage terms and higher rates for your policy.

Insurance Provider: It is recommended that you research the company's client ratings and claim handling statistics to ensure that you receive top-notch service. Taking the time to investigate these factors can help you make an informed decision.

Customization: Try to find an insurance policy which can be designed according to the requirements of an individual, facilitating adding or removing covers.

Conclusion: Finding the Right Plan

The bottom line is that risks have to be managed, and it’s essential to protect your assets in the world of business. If something unexpected happens, it is vital to protect your investment with commercial auto insurance. Whether you run a fleet of delivery vehicles or offer transportation services, there is no doubt that understanding and settling for the right commercial auto insurance is essential for everyone, including those who solely rely on cars for day-to-day operations.

Summit Cover is one of the leading insurance providers in Canada that provides customized solutions based on business requirements. Get the right coverage for your commercial vehicles to secure compliance with local regulations and safeguard your assets. This way, you will be secure and can focus on increasing your business while knowing that you are covered in case of unexpected incidents!

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