Common commercial auto insurance exclusions

Key takeaways:

  • Commercial auto insurance covers vehicles used for business purposes.
  • It covers expenses and legal claims related to property damage, injuries, and deaths.
  • Many commercial policies exclude uninsured/underinsured motorist insurance, Personal Injury Protection (PIP), emergency roadside insurance, and personal effects insurance

As a Florida business owner, there are many risks to factor in when trying to protect your company. Commercial auto insurance is one area that’s often overlooked. Many business owners assume that a commercial auto insurance policy will cover everything in the event of an accident, but commercial auto insurance exclusions do exist.

This post will discuss the basics of commercial auto insurance, what it covers, and what it excludes. 

Understanding commercial auto insurance

Commercial auto insurance protects you financially if you (or an authorized driver) are ever involved in an accident in a vehicle you drive for business purposes. A standard commercial policy in Florida includes liability coverage, which will help pay claims related to property damage, injuries, or deaths if you caused the accident. It also covers legal fees and court costs associated with lawsuits. 

What vehicles can be covered?

Commercial auto insurance protects you and any authorized employees or drivers for your business. Covered vehicles can include cars, passenger or delivery vans, trucks, limousines, or buses used for business purposes. Other vehicles like motorcycles, boats, jet skis, ATVs, RVs, snowmobiles, and trailers may also be covered.

Your policy can cover any vehicle you own, rent, lease, or hire. 

Specialized auto coverage

Some commercial vehicles require specific types of coverage. For example, tow trucks need additional “on-hook” coverage if the car gets damaged. Cargo insurance is another type of specialized coverage. It protects you from liability relating to damaged cargo that’s being hauled. If you own or operate vehicles that frequently carry cargo, you may need this type of coverage.

Who needs commercial auto Coverage?

Who needs commercial auto insurance? If you use your car for work or have employees who operate vehicles for business purposes, you likely need a commercial auto policy. You might need this type of coverage, even if you’re self-employed. Ask yourself a few questions.

Do you…

  • Transport people or food regularly?
  • Drive to multiple job sites during the day?
  • Transport cargo, tools, or equipment?

A Florida commercial auto policy is required if you said “yes” to any of the above questions. Industries that often need commercial coverage include:

  • Auto services & car dealers
  • Building design
  • Cleaning services
  • Construction/contractors
  • Delivery services
  • Food & beverage
  • IT
  • Landscaping services
  • Real estate agents/brokers
  • Retail
  • Rideshare and food delivery services (Uber/Uber Eats, Lyft, DoorDash)
  • Transportation services (vans, buses, limousines) 
  • Trucking
  • Wholesale

How much coverage do you need?

Florida businesses must carry at least $10,000 in Personal Injury Protection (PIP) and $10,000 for property damage liability. $10,000 might not go far if there are serious injuries or you’re sued after an accident. You may need more coverage if you operate commercial vehicles daily in a high-risk industry. 

Now, let’s talk about four things that may be excluded from commercial auto insurance.

scribblingly 1. Uninsured or underinsured motorist insurance

According to 2019 data from the Insurance Information Institute, 20.4% of Florida drivers are uninsured. That’s the sixth-highest rate in the country and way over the national average of 12.6%. 

Unfortunately, uninsured/underinsured motorist insurance is often excluded from many commercial auto policies. This coverage protects you if you’re involved in an accident with a driver who either doesn’t have insurance or doesn’t have enough insurance to cover your injuries or property damage. 

2. Personal Injury Protection

PIP is another exclusion from commercial auto policies. This coverage pays for medical expenses if you’re injured in an accident, regardless of who is at fault. PIP is critical in Florida since we live in a “no-fault” insurance state. You must file an accident claim with your insurance carrier, regardless of who caused the accident.

It also makes it less likely that you’ll be able to sue the other driver for things like “pain and suffering.” The other individual must have committed gross negligence or abusive behavior that results from injuries sustained during an auto collision

3. Emergency roadside insurance

Emergency roadside insurance is another common exclusion from commercial auto insurance policies. This coverage pays for towing, fixing flat tires, and battery service for your commercial vehicles. It may also cover delivering gas, oil, or tires. 

4. Personal effects insurance

Personal effects insurance protects belongings worn or carried in a commercial vehicle. It pays if they’re damaged or stolen while in your vehicle. You can choose which valuables to cover under your policy or select a claim limit that protects all personal effects inside the car. 

Commercial vs. personal insurance: Know the difference

There can be confusion on whether certain businesses or vehicles must be commercially insured, especially if you’re self-employed or own a small business with only a few employees. Your personal auto insurance covers you while driving to work. Other instances are not so clear. 

For example, you might use your car to drive to a job site or deliver something to a client. Maybe you occasionally send an employee to pick up coffee and doughnuts for the office or lunch for a client meeting. In some cases, personal insurance may cover these kinds of activities. 

All Florida drivers must carry personal liability coverage as part of their auto insurance policy. Indeed, most states require liability coverage. Just like with commercial auto insurance, personal liability covers injuries and property damage to others in the event of an accident. Many insurance policies also include uninsured/underinsured drivers, collision, and comprehensive coverage. 

If your employee gets into an accident while driving to a client meeting or delivering something, their insurance might cover the damages and protect them in the event of a lawsuit. However, if your employees regularly use their car or a company vehicle to do their job, they should be included in your commercial auto policy. 

Hired and non-owned auto insurance

A hired and non-owned auto insurance (HNOA) policy covers lawsuits due to accidents, whether they occurred in a personal, rented, or leased business vehicle. It can protect your employees who use these business vehicles as part of their jobs. It can also cover employees who get into accidents while running business errands or driving a rental car during a business trip. 

HNOA exclusions

An HNOA policy doesn’t cover the cost of repairs for rented or personal vehicles. You’ll also have to pay to replace or repair damaged, lost, or stolen equipment or other property that’s being transported in rented/personal vehicles. Finally, it doesn’t cover accidents that occur during your employees’ commutes to work or if they run personal errands in a rented/leased vehicle after business hours.

Make sure you have the right commercial auto coverage

If your company operates vehicles for business purposes, you need commercial auto insurance. It’s essential to protect yourself, your employees, and your financial investments if there’s an accident that results in property damage or injuries. 

Avante Insurance can help you secure the right commercial auto policy or any of your other business insurance needs. Contact us today to request a quote. 


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