If you are running a business, whether it be a public company or a small start-up, you likely know how crucial commercial vehicles are to keeping production going and generating income. But to make sure all goes smoothly with operations, you need to have the proper auto insurance in place. Every driver on the road needs to carry insurance. A commercial auto insurance policy can help protect your business in the event of a collision or other incident.
What is Commercial Auto Insurance?
Commercial auto insurance covers businesses when their company-owned vehicle is involved in a collision. It works to protect the business’s assets should an employee driving a company car cause damage or injuries in an accident. Commercial auto insurance is intended for cars that are used solely to conduct business. Liability insurance is the standard, but there are other commercial insurance policy add-ons that can help protect a business further. Auto insurance of any kind is vital for anyone driving in Chicago.
Types of Commercial Vehicles
In general, any vehicle you use to conduct business and generate income can be considered a commercial vehicle. This definition can apply to numerous different types of vehicles. Some common commercial vehicles include:
- Food truck
- Non-emergency medical transportation
- Construction truck
- Cargo truck
Illinois Auto Insurance Requirements
Every driver in Illinois needs to carry auto insurance. It does not matter if you are driving a personal vehicle or a commercial one. You need to at least meet the liability insurance requirements as outlined in the Illinois insurance laws. The mandatory amount of liability insurance every Illinois driver must at least meet is:
- $25,000 for bodily injury liability to one person
- $50,000 for bodily injury liability per accident
- $20,000 for property damage per accident
Do You Need Commercial Auto Coverage?
Yes. As previously mentioned, every driver on the roads in Illinois needs to have insurance. This is especially true for commercial vehicles. To be considered a legal driver in Chicago, you must meet the state’s liability insurance requirements. However, it is recommended that you expand your insurance coverage by utilizing auto policy add-ons. Liability insurance only covers injuries and damage you cause. Injuries you sustain, and damage to your commercial vehicle will not be paid for by your insurance provider, making obtaining the appropriate coverage crucial. One collision is enough to bankrupt your business, but the right commercial auto insurance policy can prevent this from happening.
What Does Commercial Car Insurance Cover?
A basic commercial auto insurance policy generally only includes liability insurance. Liability insurance pays for damage and injuries you cause to another driver in a collision. While this is incredibly valuable protection for your finances, liability insurance will not help pay for damage to your vehicle, nor will it cover your injuries. For this reason and others, it would be worth considering purchasing auto policy add-ons. Some common commercial auto insurance policy add-ons include:
- Medical Payments (MedPay) – Medical payments coverage will cover you and any passengers’ medical expenses following a collision. It pays out no matter who was at fault.
- Uninsured/Underinsured Motorist Insurance – Despite car insurance being required for every driver on the road, many people still choose to go without coverage. If you end up in an accident with a driver lacking insurance, uninsured/underinsured motorist insurance can assist you with paying for damages and injuries.
- Comprehensive Insurance – Comprehensive insurance covers damage your commercial car sustains when not in use.
- Collision Insurance – This type of insurance pays for damage to your commercial vehicle following a collision. It pays out no matter who was at fault for the accident.
Cost of Chicago Commercial Car Insurance
On average, commercial auto insurance can cost around $1,700 per year. However, being in a populated city like Chicago, your insurance premiums may be much higher. This is because Chicago sees a lot of traffic, and more traffic means higher chances of accidents. There are also more residents which can lead to crimes like theft and vandalism. Your insurance provider must take all of this into account when establishing your premiums. They will also look into personal factors like the industry of your business and the driving records of your employees. Coverage levels will play a part in your commercial auto premiums as well. It’s best to keep all of this in mind as you shop for commercial insurance. We recommend shopping around to get quotes from numerous insurance providers throughout the Chicago area. This will help you analyze the commercial policies on the market and inspect their associated rates.
Commercial Auto Insurance vs. Personal Car Insurance
Depending on the size of your business, the difference between personal and commercial car insurance can get a bit fuzzy. You may be using your personal vehicle as a company car to complete transactions or visit clients, and it’s likely that you already have a personal auto insurance policy for your vehicle. However, business use for the vehicle will not be covered by your personal auto insurance. Commercial auto insurance covers company-owned vehicles when being used for business purposes. Personal auto insurance will only cover incidents while you are using your vehicle for personal reasons. If you are using your personal car for business purposes, you will need to purchase a commercial auto insurance policy to assure that if anything happens while on the clock, it will be covered. Commercial auto insurance will also provide coverage for employees.
If you are using your vehicle for one or more of the following, then you need to get commercial car insurance:
- Transport goods
- Drive clients and/or employees
- Generate income by charging for rides
- Haul heavy workloads
- Towing a trailer for a company
- Complete a service
If you are still unsure what kind of auto policy would be right for you and your business, contact an insurance agent today to get more information and begin a quote.