Understanding Your Business Auto Insurance Policy

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Running a business these days is never easy and choosing the right type of insurance for your business can be confusing unless you have done your research! When purchasing business insurance, it is essential to make sure you have proper coverage for the autos used in your daily business operations. A commercial auto policy varies from a personal auto policy in that it covers commercial use of automobiles. Terms and conditions are explained in the parts of the policy. It is very important to understand the different parts of the policy and what coverage is available.

Covered Autos

The vehicles covered by a business auto insurance policy are ones that are owned, hired, leased or borrowed by a business and designed to be driven on public roads. A “symbol 1” provides the broadest coverage available and indicates that any auto is covered. A symbol 1 includes owned, hired, and non-owned autos. A “symbol 7” narrows this coverage only to autos specifically described on the policy declarations page.

Covered Drivers

A covered driver on an auto insurance policy for business owners can be the owner himself or his employees. A covered driver is the business owner himself or anyone that is driving a covered vehicle with the permission of the named insured. The coverage does not apply to a person who is selling, serving, repairing, or parking autos, unless this is the business of the insured. 

Liability Coverage

Liability coverage for a business auto insurance policy pays for the business owner's legal obligation for damages caused to others by a covered accident that results in bodily injury or property damage. The insurance company will also defend the insured legally against lawsuits and claims up to the policy limits.

Physical Damage Coverage 

Physical damage may be added to the business auto insurance policy. Physical damage, also known as comprehensive and collision coverage, covers damage to the insured's autos as the result of a covered risk in the policy. A collision is when a covered auto is hit by another vehicle or object. Comprehensive can loosely be defined as anything other than a collision. Some examples of a comprehensive coverage claim would be for damage caused by fire, wind, hail, vandalism, or theft.


The “conditions” section of a business auto policy list the legal responsibilities of the insured and the insurance company. In the conditions section of the policy, you will find information about obligations for paying the insurance premium, how to file a claim, and procedures for resolving disputes.


The definitions section of the business owner insurance policy is where the policyholder can find the so-called “fine print” of the policy. This section explains your rights as a policyholder, and the common words used within the policy are defined. It is important to understand the definitions as some of the words used within the policy may restrict or limit coverage.

If in doubt whether the business auto insurance policy is right for you, an insurance agent can explain in more detail which coverage options are mandatory and which ones are optional. Your agent has years of experience with business auto policies and can help design a business insurance auto policy that is right for you and your unique business situation. You can also take some time to do your own comparison shopping online with insurance comparison sites.

When choosing an insurance company for your business auto insurance, do some research on the company and find out its rating with the Better Business Bureau as well as its financial strength ratings using the findings from insurance rating organizations such as A.M. Best, Standard & Poor's, Fitch, and Moody's.

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  1. National Park Service. “RM 48B Commercial Use Authorizations (CUA),” Page 3.

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