Understanding Liability Coverage in Commercial Auto Insurance

Commercial auto insurance is essential for businesses that utilize vehicles in their operations. A key component of this insurance is liability coverage. Understanding this coverage type can help businesses protect themselves from significant financial losses and legal issues.

What Does Liability Coverage Include?

Commercial auto liability coverage can help protect your businesses from the financial repercussions of accidents involving your vehicles. It typically applies only to third-party damage, not damage to your vehicles. This coverage usually includes the following two main components:

• Bodily injury liability—This coverage can pay for medical expenses, lost wages, and other costs related to injuries sustained by other parties in an accident caused by one of your vehicles. It may also cover legal fees if your business is sued due to the accident.

• Property damage liability—This coverage can pay for the costs of repairing or replacing property damaged in an accident caused by one of your vehicles, including other vehicles, buildings, fences and structures.

Why Is Liability Coverage Important?

Liability coverage can financially shield your business from the costs associated with accidents, allowing you to focus on operating without worrying about potential liabilities. Additionally, commercial auto liability insurance is required by law in most states.

Choosing the Right Coverage

When selecting liability coverage, consider the following factors:

• Coverage limits—Determine the necessary coverage limits to adequately protect against potential claims. While higher limits offer better protection, they also come with increased premiums.

• Vehicle types—Consider the different types of vehicles in your fleet, as they may require varying levels of coverage. For example, heavy trucks often need higher limits than passenger cars due to the greater potential for damage.

• Business requirements—Evaluate your business’s needs, including the number of vehicles, the nature of your operations and the associated risks. Tailoring coverage to these factors can avoid insurance gaps.

Commercial Auto Insurance in Whitesboro, TX

Commercial auto liability coverage can provide financial protection, aid legal compliance, and help your business manage risks effectively. The team at Wood Insurance Agency can review your commercial auto insurance policy. Contact us today.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.