Insurance coverage for automobiles can create numerous gaps in coverage and is another example of why your insurance agent needs to know your organization when placing your insurance coverage. There are issues with pollution, cargo, employees driving their own cars for work and mobile equipment that need to be addressed when reviewing or putting in place this coverage. There are additional issues if you travel abroad and rent a car or drive your car beyond our Northern or Southern boarders.
In the event of an accident the insurance on the damaged vehicle is primary. If there is an auto accident and the damaged vehicle is company owned the company’s policy is primary if the vehicle is an employee’s their insurance is primary. Any physical damage to an employee’s own car in a work related accident is not covered by the company’s policy. Employers that have sales people, someone taking deposits to the bank, picking up parts needed or any employees driving their own vehicle for work need hired and non-owned auto coverage. This coverage provides the company with protection in the event they are brought into a claim.
The coverage for an automobile is not the same as that for mobile equipment. Automobile coverage is for licensed vehicles that are driven on the road. Examples of mobile equipment includes golf carts, fork lifts, scissor lifts, water tank trucks used on a work site and many other construction vehicles which are excluded on a commercial auto policy.
Cargo and pollution are other exposures that should be reviewed. Stock while in transit on an insured vehicle is not covered on the auto policy. In the event of an accident, the leakage of any pollutants from a vehicle involved will not be covered unless they are necessary for the operation of the vehicle. Before your truck’s refrigeration system fails make sure you have the proper coverage if spoilage is an issue for your company.
If you are a trucking company, auto garage or a livery service there is special coverage you need. Commercial auto policies for these industries have special coverages built in. There are many players getting into the ride share space which also brings in new exposures. I recently had an inquiry about coverage for an app that allows the sharing of cars.
Commercial auto insurance policies have five sections. The first identifies what autos are covered. The second describes the liability coverage. Third is the portion of the policy describing physical damage coverages. Next are the business auto conditions and the definitions of the policy terms. These policies are written on an annual basis and can have various limits and deductible.
I believe that the exposures a company has from automobiles are the greatest and most common. Auto claims today are also more expensive than in the past due higher medical costs, distracted driving, increased traffic, more fatalities and rising auto repair.
I hope this information is helpful and welcome any questions. Please reach out to us if you would like a thorough review of you current coverage.