Commercial Auto Insurance for Your Business Explained

Commercial auto insurance differs from personal auto insurance in many ways, so let’s dive into what it is, how it's different from personal auto insurance, costs, the minimum coverage requirements for New Jersey businesses, and the consequences of not having commercial auto insurance.

What is Commercial Auto Insurance?

Commercial auto insurance covers vehicles used for business purposes, and it’s invaluable for companies requiring business-related transportation, including retailers, service providers, and transportation companies. The coverage can also be applied to a wide range of vehicles, including cars, trucks, vans, SUVs, and assorted service vehicles.

What’s The Difference Between Personal and Commercial Auto Insurance?

Commercial auto insurance policies are different from personal auto insurance policies in many ways. For example, commercial auto insurance typically has higher liability limits than personal auto insurance. This is because businesses are more likely to be sued for damages caused by their employees while driving on company business rather than just held accountable for damages.

Another difference between commercial and personal auto insurance is that commercial policies cover vehicles used for business purposes only. Hired and non-owned auto insurance (HNOA) provides protection for employees who use their personal vehicles for company business. This means that if you have a personal vehicle that you also use for business, you will need to purchase a separate policy for that vehicle.

How much does commercial auto insurance cost?

Commercial auto insurance typically costs more than a personal auto insurance policy. This is because commercial policies have more coverage in the event of an accident. Remember, a commercial auto policy covers the business, not just the individual driver. 

Factors that go into the cost of your insurance include the following:

  • Industry risks
  • Type and number of vehicles you own
  • Utilization of the vehicles
  • Employee driving records
  • Type of coverage and policy limits you choose
  • Previous auto insurance claims history

Implementing internal operational changes, such as no texting while driving and general ongoing safe driving practices can go a long way in reducing the cost of insurance. 

New Jersey Businesses: Minimum Coverage Requirements

If you own a New Jersey business, you must purchase commercial auto insurance if you have vehicles for your business.

The state law requires all commercial auto policies to have a minimum liability limit of $15,000 per person, $30,000 per accident for bodily injury and $5,000 for property damage (i.e. 15/30/5).

Consequences of Not Having Commercial Auto Insurance

If your business does not have the minimum amount of commercial auto insurance required by law, you could be subject to several penalties. For example, if one of your employees is involved in an accident while driving on company business, and it is determined that your business did not have the proper insurance coverage, you could be sued for damages. 

In addition, your business could be fined by the state of New Jersey for not having the required insurance coverage. The fines for not carrying the minimum commercial auto insurance can range from $500 to $5000. Further, if your business is caught operating without commercial auto insurance, your business license could be suspended.

Businesses need to have the proper amount of commercial auto insurance in place. If you are unsure if your business has the right amount of coverage or if you have any other questions about commercial auto insurance, we encourage you to contact our office and speak with one of our experienced agents.

Calhoun Agency Can Help You Get the Coverage You Need

Now that you know more about commercial auto insurance, you may be wondering how to get the coverage your business needs. The best way to find out is to speak with an experienced insurance agent who can help you understand your options and choose a policy that meets your needs.

At Calhoun Agency, Inc., we have been helping businesses in New Jersey find the right insurance coverage, and we take pride in providing our clients personalized service and attention.