Commercial auto insurance almost always includes liability coverage. Insurance companies adjust coverage to match the risks your vehicles and business face. Having enough is critical. Liability insurance provides coverage when you or your driver damages another car, person, or property. Therefore, it's critical to have enough coverage. But, how much is enough?
Your Situation Makes a Big Difference
When trying to determine appropriate amounts of liability coverage, your business insurance agent looks at the type of risks your company faces. Some reasons you may need more coverage than others include the following:
- You operate on the road more frequently. Drivers using their vehicles daily are at a higher risk of an accident.
- The size of the car. The size and type of the vehicle matters as a result of the risk it poses. Larger trucks can cause significantly more damage than a passenger car.
- The type of material you carry. If your truck carries dangerous materials, it is more expensive to insure overall. This includes requiring more liability insurance for risks.
- The frequency of claims made in the last few years matters. Companies more likely to file a claim often need more coverage.
- Your drivers can play a role. Companies with less skilled drivers may wish to increase their coverage.
These are just the basics of what impacts your needs. It is up to your commercial auto insurance provider to guide you. Having the right amount is important. You do not want to overpay for coverage you do not need. However, you do not want your company to not have enough if an accident occurs. Let your agent help you determine the appropriate amounts of coverage.
Why More Is Best
Generally, commercial auto insurance policies include $1 million or more in liability coverage. This is the basic level. However, some companies should consider more.
Imagine the costs associated with a multiple-car accident your driver causes. Consider what might happen if your vehicle rolls over on the highway. The damage can be significant. Because people are more likely to file a lawsuit against a company than an individual, you should carry ample protection here.
But, how much is enough? Your agent will talk to you about this. In most cases, he or she uses previous data to help you. Area claims from other drivers are a part of it. Your company’s type and risk level factor in. They also gather information about the company’s goals. You can get a comprehensive commercial auto insurance policy that gives you peace of mind.
Also Read: How to Protect Your Business with Insurance