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Commercial Auto Insurance Policy Information

Business Auto Insurance

Commercial Auto Insurance. Commercial auto insurance is a type of insurance policy that provides coverage for vehicles used for business purposes. This includes vehicles such as delivery trucks, company cars, and other vehicles used in the course of conducting business.

Commercial auto insurance policies often have higher limits of liability than personal auto insurance policies, as the vehicles covered by the policy are typically used for business purposes and may be at higher risk for accidents and losses.

The specific coverage provided by a commercial auto insurance policy can vary, but it may include protection for the vehicle itself, as well as liability coverage for injuries or damage caused to others in an accident.

Commercial auto insurance protects your business from liability and physical damage lawsuits from accidents caused by company vehicles, such as cars, trucks and vans - with rates as low as $67/mo. Get a fast quote and your insurance card now."

Below are some answers to commonly asked business auto insurance questions:


What Is Business Auto Insurance?

Business auto insurance is a type of insurance that protects a business's vehicles and the people who drive them. It provides coverage for damages and injuries that may occur as a result of an accident, as well as liability protection for the business in case of a lawsuit.

This type of insurance can be purchased for a variety of vehicles, including cars, trucks, vans, and buses, and can be tailored to meet the specific needs of a business. Some common coverage options include liability, collision, comprehensive, medical payments, and rental reimbursement.

How Much Does Commercial Auto Insurance Cost?

The average price of a standard $1,000,000 Commercial Auto Insurance policy for small businesses ranges from $67 to $99 per month based on location, number of vehicles and drivers, industry, driving records, experience and more.

What Factors Affect The Cost Of Business Auto Insurance Premiums?

While there are many factors that are taking into consideration for business auto pricing, following are some of the most common ones:

  • Amount of coverage: The coverage limits you choose may affect the premium; the higher the coverage amount, the higher your premium. If you're using your vehicle to conduct business, you may want to consider a higher liability limit so that the coverage will be sufficient to protect both your business and personal assets if you are sued due to an accident.
  • Amount of deductible: The cost of your insurance is directly linked to the amount of your deductible. The deductible is the amount of money that you agree to pay for a loss or claim before your insurer pays any monies for the remaining amount due to cover the cost of the claim. For example, if your vehicle incurred $10,000 of damage in an accident and your deductible is $5000, you would pay the first $500 and your insurer would pay the remaining $9,500. The higher your deductible, the lower your premium.
  • Anti-theft devices: Alarm systems or tracking systems that locate your vehicle if stolen may reduce your premium.
  • Driving and claims history: Your personal driving record and the number of claims you have previously filed may affect your ability to obtain insurance in the private market and may impact the amount of your premium.
  • Garage location: Where you garage your vehicle may impact premiums. If you have access to an indoor garage or locked parking lot - places that decrease the likelihood of theft - you may qualify for a lower premium.
  • Geographic location: The geographic region in which your business operates may affect your premium. For example, areas prone to extreme weather - hail, wind storms, hurricanes, etc. - higher traffic patterns or higher risk of theft may have higher insurance rates.
  • Insurance history: Failing to maintain continuous automobile liability insurance coverage as required by law can result in a higher premium when new coverage is sought. An insurer may also refuse to provide coverage if you have had a lapse in coverage.
  • Safety devices: If you're buying or leasing a new vehicle, consider getting one with anti-lock brakes, front and side airbags, automatic seat belts and daytime running lights; these safety devices may result in a lower premium.
  • Type of vehicle: Premiums are linked to the type of vehicle you drive. So if you're buying or leasing a new car or truck, check the insurance rates before you make your final choice.

Do I Have To Carry Commercial Auto Insurance?

Personal auto insurance policies may provide enough coverage for some smaller businesses. But if you require specific commercial auto insurance coverages, higher liability insurance limits, transport goods or people, or have other needs, then you'll probably need business auto insurance.

Not sure whether you need a commercial auto or personal insurance policy? Following are some questions and answers that shed light on the differences between business auto policy (BAP) vs personal auto insurance policies (PAP):

Do You Need A Personal Or Commercial Auto Policy?

If you use a vehicle for work, you probably need a commercial policy.

While personal and commercial auto insurance policies provide similar types of coverage, there are important differences. Commercial auto insurance policies typically have higher liability limits than a personal car insurance policy.

For example, a typical commercial auto policy may have a liability limit of $1 million. A business auto liability insurance policy also may have provisions that cover rented and other non-owned vehicles, such as employee-owned vehicles that are driven for company business.

Several factors should be considered when determining whether a personal or commercial policy is best. These include:

  • Who owns or leases the vehicle? You or the business as an entity? Who drives the vehicle? You or your employees?
  • How is the vehicle principally used? For transporting people, delivering packages or carrying hazardous materials?
  • Do you allow your employees to take the vehicle home, or is its use restricted to work hours?

Discuss these issues with a licensed insurance broker who is knowledgeable about commercial and personal auto insurance. Also, consider purchasing collision and comprehensive (coverage for losses other than collision) coverage to protect your business from losses and damage to your vehicle. Banks and other financial institutions with a security interest in your vehicle will require both comprehensive and collision coverage to protect their interest in the vehicle.

Who owns and/or drives the vehicles for insurance purposes?

If your car, van or truck is owned by the business, then you'll probably need a business auto insurance policy.

How is the vehicle used?

If you use your vehicle for business purposes, you'll most likely need a commercial auto insurance policy.

What is the weight & type of vehicle?

If the car, truck or van you drive weighs more than a normal size pickup or SUV, like a dump truck, tow truck, or tractor trailer, you might require a business auto insurance policy.

Do you have any federal, state or contractually required liability limits?

If your business car, van or truck requires higher liability limits, like for the FMCSA, state agencies or for a contract - you will probably need commercial auto insurance. Business auto insurance policies offer higher limits than personal ones.

How Do The Business Auto Coverage Form and The Personal Auto Policy Handle Losses Involving Intentional Acts?

The following Personal Auto Policy exclusions are not in the Business Auto Coverage Form. There is no coverage:

  • For property rented to or used by an insured
  • For vehicles used for public or private livery
  • If the insured is in the business of selling or caring for autos
  • If the vehicle is used in business
  • If someone uses a car without reasonable belief that he or she has permission to do so


What Are The Differences In Physical Damage Coverage Options Between The Business Auto Coverage Form vs The Personal Auto Policy?

Physical damage coverage in the Personal Auto Policy is called Coverage for Damage to Your Auto and is similar to the Physical Damage Coverage provided in the Business Auto Coverage Form. The Personal Auto Policy's coverage applies to all owned and non-owned cars. The Business Auto Coverage Form's coverage is based on the symbols on the declarations. The Business Auto coverage Form has three physical damage coverage options and the Personal Auto Policy has two.

What Does Commercial Auto Insurance Cover?

The person injured in an automobile accident may be a young child, a wage earner, a surgeon, or a homeless person. The costs of the accident may be relatively small or run into the millions of dollars, depending on the victim and his or her injuries. Do you have the assets to handle such costs? Moreover, is that the way you want to use them? If not, the Insurance Services Office (ISO) Business Auto Coverage Form is designed to protect you.

The ISO Business Auto Coverage Form protects your assets in several ways:

  • Covered auto liability coverage insures your legal obligations that arise from an accident, including lawsuits and their associated costs. The limits you purchase should be high enough to handle the potentially serious injuries and loss of earnings a victim may sustain.
  • Uninsured and underinsured motorists coverages protect you when you are involved in an accident caused by a driver who has no insurance or insurance with relatively low limits. The limits you select for this coverage should be the same as your liability limits.
  • Physical damage coverage on vehicles directly protects your assets. Comprehensive, Specific Causes of Loss and Collision are the coverage options available. Deductibles should be as high as you can comfortably absorb to maximize the protection provided relative to the premium cost.
  • Medical payments coverage and towing expense costs for private passenger vehicles are other optional coverages to consider.


The insurance company pays all sums an insured is legally obligated to pay as damages because of bodily injury or property damage covered by this insurance and caused by an accident resulting from owning, maintaining, or using a covered auto. Pollution cost or expense that is a consequence of the same covered accident is also covered.

The company has both the right and duty to defend any insured in a suit requesting such damages or pollution costs and expenses but only if coverage is available under this insurance. The insurance company makes the decision as to when and how to investigate, settle, or litigate, as it deems appropriate. Any defense obligation ends when the liability limit of insurance is used up paying judgments and settlements.

What Doesn't Commercial Auto Insurance Cover?

Every business insurance coverage form or policy has limitations and exclusions. This is because either the coverages are needed by only specific types of businesses or the risk or exposure to loss is not considered insurable for one or more reasons. Some of the more common exclusions are:

  • Bodily Injury To Employees
  • Care, Custody Or Control
  • Certain types of electronic devices
  • Contractual
  • Expected Or Intended Injury
  • Handling Of Property
  • Operations and Completed Operations
  • Pollution
  • War
  • Wear and Tear


What Type Of Vehicles Are Covered Under A Commercial Auto Insurance Policy?

The coverages available are listed on the declarations. A box with numbers in it is next to the coverage. These are called symbols. They explain which autos are insured for the particular coverage. Each coverage can have one or more symbols. The symbols translate as follows:

  • 1 - All autos are covered. No additional symbols are needed.
  • 2 - All autos you own are covered.
  • 3 - Only private passenger autos you own are covered.
  • 4 - Only autos you own that are not classified as a private passenger are covered.
  • 5 - Autos you own for which no-fault coverage is required are covered.
  • 6 - Autos you own for which uninsured motorists coverage is required are covered.
  • 7 - Only scheduled autos are covered.
  • 8 - Any auto you hire, borrow, or lease is covered.
  • 9 - Any auto not owned by you but used by an employee, volunteer or partner for your business is covered but only for your benefit.
  • 19 - Mobile equipment if subject to financial responsibility laws


If symbol 1 is used, no other symbols are needed. However, a combination of the other symbols is normal when symbol 1 is not used. Following is more detailed information on the business auto coverage symbols:

The Insurance Services Office's (ISO's) Business Auto Coverage (BAC) Form (CA 00 01) protects the named insured ("you") against the financial consequences of its legal liability for bodily injury or property damaged not excluded by the policy and arising out of the ownership, maintenance or use of a "covered auto." This makes the covered auto symbols the key to the Business Auto Coverage Form. Each symbol grants insured auto status to a different class of vehicle.

Symbol 1 - (Any Auto): "Any," as provided in Symbol 1, contains no limitations; it means exactly what it says. Regardless of the auto's status as owned, nonowned, hired, borrowed, or other status, it is covered. The only limitations on an "Any Auto," auto are the policy exclusions. Essentially, if the named insured (the "you") or "automatic insured" (subject to five exceptions) are held legally liable for injury arising out of the ownership, maintenance, or non-excluded use of an auto, the BAC provides coverage.

Symbol 1 is almost exclusively a liability coverage symbol. It is unlikely underwriters will allow its use with any other auto policy coverage type (e.g., medical payments, uninsured and underinsured motorists (UM/UIM), or physical damage). Due to the breadth of insured vehicle status granted by Symbol 1 (owned, nonowned, and hired), it should be used to trigger liability coverage whenever possible. However, use of Symbol 1 may not always be appropriate. Specific inappropriate Symbol 1 usage generally flows from the unique risk characteristics of a particular insured.

Symbol 2 - (Owned "Autos" Only): Only those "autos" you own (and for Liability Coverage any "trailers" you don't own while attached to power units you own). This includes those "autos" you acquire ownership of after the policy begins.

Symbol 3 - (Owned Private Passenger "Autos" Only): As the title suggests, use of this symbol limits protection to only private passenger autos owned by the insured. If the insured acquires any private passenger autos during the policy period, protection is extended to these vehicles during the remainder of the policy period. Use of this symbol is generally limited to liability coverage.

Symbol 4 - (Owned "Autos" Other than Private Passenger "Autos" Only): Like Symbol 3, this symbol extends coverage to owned autos, but this extends coverage to only "other than private passenger autos" such as trucks (light, medium, heavy, and extra-heavy). In addition to the vehicle, protection is extended to any nonowned trailer while attached to a vehicle protected under this symbol. If the insured acquires additional "other than private passenger autos" during the policy period, protection is extended to these vehicles during the remainder of the policy period. Use of this symbol is generally limited to liability coverage.

Symbol 5 - (Owned "Autos" Subject to No-Fault): This symbol is used when a vehicle is licensed and principally garaged in a state subject to and under "no-fault" (aka Personal Injury Protection (PIP)) statutes. The symbol extends coverage to any autos newly acquired during the policy period. As suggested, this symbol is limited to liability coverage.

Symbol 6 - (Owned "Autos" Subject to Compulsory Uninsured Motorists Laws): This symbol is used when a vehicle is licensed and principally garaged in a state subject to and under uninsured motorist statutes. In these states, the insured cannot reject uninsured motorist coverage. Extends coverage to any autos newly acquired during the policy period. As suggested, this symbol is limited to uninsured motorist coverage.

Symbol 7 - (Specifically Described "Autos"): Use of this symbol limits coverage to only those autos specifically listed (scheduled) in the policy. If the auto is not scheduled, there is no coverage. Newly acquired autos are subject to specific restrictions and only a short period of "automatic coverage." However, to gain the 30 days of "automatic" protection granted, the insurance carrier must already insure all the insured's vehicles on the same policy or the new vehicle must be a replacement for an existing auto. If the insurance carrier does not insure all the vehicles on the same policy, and the new vehicle is in addition to the current schedule, there is no automatic coverage on the vehicle, and it is not covered until the insurer is notified of its existence. Symbol 7 is usually limited to physical damage protection, but it can be used to signify liability, uninsured/underinsured motorists, or physical damage.

Symbol 8 - (Hired "Autos" Only): Only those "autos" you lease, hire, rent or borrow. This does not include any "auto" you lease, hire, rent, or borrow from any of your "employees", partners (if you are a partnership), members (if you are a limited liability company) or members of their households.

Symbol 9 - (Nonowned "Autos" Only): Only those "autos" you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes "autos" owned by your "employees", partners (if you are a partnership), members (if you are a limited liability company), or members of their households but only while used in your business or your personal affairs. (Emphasis added. Note: Essentially, Symbol 9 extends vicarious liability protection to the named insured (the "you") for bodily injury or property damage suffered by a third party caused by someone operating a covered vehicle on the named insured's behalf or benefit.)

What Are Common Commercial Auto Insurance Coverage Gaps?

Business Auto Insurance Coverage Gaps
Improperly Insuring Private Passenger Autos

Often times small business owners choose to insure a businesses owned vehicle on their personal auto insurance policy.

For example, personal auto policies eligibility rules generally will not cover newly purchased pickups or vans that have a gross vehicle weight of more than 10,000 pounds. That means most personal car insurance policies are not the right choice for insuring commercial vehicles.

Using the Wrong Covered Auto Symbols

To avoid business auto coverage gaps, it is important to pay close attention to the symbol descriptions and to understand how the symbols are supposed to be used.

For example, one of the most serious mistakes an insured may make is to use symbol 7 for liability coverage. It's a mistake because symbol 7 provides very limited coverage for newly acquired autos.

Improperly Insuring Mobile Equipment

Mobile equipment that is subject to motor vehicle laws should be covered under a business auto policy, not the commercial general liability policy.

A large coverage gap exists if an insured mistakenly believes one of it's vehicles is covered by its general liability policy. So since the equipment was not specifically scheduled in the commercial auto policy, the insured has no liability coverage.

No Hired and Non-Owned Auto Liability Coverage

When a business owns no autos, its owners or managers often believe commercial auto coverage is not necessary. Why spend money for a business auto policy when there are no autos to insure?

But the fact that a firm owns no vehicles does not mean it doesn't have auto-related exposures. Someone's autos are likely to be used on the company's behalf, and that use creates an auto liability exposure.

Also rental cars also create loss exposures for a business. If the owner of the business rents a car and is in a car accident, the business may be sued for damages that exceed the liability limit provided by the rental agency.

A coverage gap often exists when an employee who is traveling for business on behalf of his or her employer hires an auto in his or her own name rather than in the name of the business entity. If they hurt someone or damage property, the business can be sued for any damages that are larger than liability limits provided from the rental car company.

No Hired Auto Physical Damage Coverage

Many business owners recognize the importance of insuring hired autos for liability but overlook the significance of hired auto physical damage coverage. Failure to purchase this coverage naturally creates a coverage gap.


What Are The Auto Insurance Financial Responsibility Laws?

The fifty states and the District of Columbia have security-type laws that prohibit anyone involved in any accident from driving unless he or she can show that he or she can pay damages.

COMPULSORY AUTO LIABILITY INSURANCE

Forty-seven states and the District of Columbia currently require that financial security be in effect on all registered vehicles regardless of involvement in an accident.

Most compulsory auto liability statutes require that all motor vehicles maintain a minimum limit of security. Farm equipment and vehicles not designed for use primarily on highways generally are excluded.

The limits specified are minimum requirements for amounts recoverable on account of injury to or death of any one person in an accident, on account of injury to or death of all persons in one accident, and on account of property damage arising out of the use of a motor vehicle in one accident.

Penalties for noncompliance vary among the jurisdictions. Some require proof of insurance at the time of registration. A majority of the statutes extend to out-of-state operators.

FINANCIAL RESPONSIBILITY LAWS

Administrative officers responsible for enforcing financial responsibility laws of the various states require sufficient security to satisfy any judgment from a vehicle operator involved in an accident resulting in bodily injury or in damage to property in excess of amounts ranging from $100 to as much as $1,000 in some states.

Financial responsibility requirements are not necessarily made obsolete by statutes requiring the maintenance of liability insurance or no-fault insurance.

Proof of financial responsibility may be required for one or more years following an accident. Security usually is not required when the vehicle owner's insurance company furnishes a notice (SR-21) stating that an acceptable amount of automobile liability insurance was in effect at the time of the accident.

An operator's license is suspended when the operator is unable to furnish security or proof of financial responsibility. Such suspension continues until security or proof is filed or until one or more years after the accident, if no action is filed.


What Are The Minimum Car Insurance Requirements By State?

Keep in mind business auto insurance limits are usually required to be higher than the state minimums - either by state or federal regulations - or by contract.

State Minimum Required Auto Insurance Limits
Alabama
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Alaska
  • $50,000 bodily injury liability per person
  • $100,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Arizona
  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
Arkansas
  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
California
  • $15,000 bodily injury/death liability per person
  • $30,000 bodily injury/death liability to more than one person
  • $5,000 property damage liability per accident
Colorado
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $15,000 property damage liability per accident
Connecticut
  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
Delaware
  • $15,000 bodily injury or death per person
  • $25,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
Florida
  • $10,000 property damage liability per accident
  • $10,000 personal injury protection
Georgia
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Hawaii
  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $10,000 personal injury protection
Idaho
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $15,000 property damage liability per accident
Illinois
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
Indiana
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Iowa
  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $15,000 property damage liability per accident
Kansas
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
Kentucky
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $10,000 personal injury protection
Louisiana
  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Maine
  • $50,000 bodily injury liability per person
  • $100,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $50,000 uninsured motorist coverage per person
  • $100,000 uninsured motorist coverage per accident
  • $2,000 medical payments coverage
Maryland
  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $15,000 property damage liability per accident
Massachusetts
  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $5,000 property damage liability per accident
  • $20,000 uninsured motorist coverage per person
  • $40,000 uninsured motorist coverage per accident
  • $8,000 personal injury protection
Michigan
  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
Minnesota
  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • $40,000 personal injury protection
Mississippi
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Missouri
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
Montana
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident
Nebraska
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
Nevada
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident
New Hampshire
  • Auto insurance is not mandatory in NH. There is no minimum car insurance requirement, but state law does require you to pay for any bodily injury or property damage arising from your operation of a vehicle that you own.
New Jersey
  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $5,000 property damage liability per accident
  • $15,000 uninsured motorist bodily injury
New Mexico
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
New York
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $50,000 liability for death per person
  • $100,000 liability for death per accident
  • $10,000 property damage liability per accident
  • $50,000 personal injury protection
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
North Carolina
  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $30,000 uninsured motorist coverage per person
  • $60,000 uninsured motorist coverage per accident
  • $25,000 uninsured motorist property damage coverage per accident
North Dakota
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • $30,000 personal injury protection
Ohio
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Oklahoma
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Oregon
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
  • $15,000 personal injury protection
Pennsylvania
  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $5,000 property damage liability per accident
  • $5,000 medical benefits
Rhode Island
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
South Carolina
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
  • $25,000 uninsured motorist property damage coverage
South Dakota
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
Tennessee
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $15,000 property damage liability per accident
Texas
  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
Utah
  • $25,000 bodily injury liability per person
  • $65,000 bodily injury liability per accident
  • $15,000 property damage liability per accident
  • $3,000 personal injury protection
Virginia
  • VA has special conditions around auto insurance. You do not necessarily have to buy auto insurance, according to the DMV, Virginia law requires that all drivers have a way to pay for injuries or property damage resulting from a car accident.
Vermont
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $50,000 uninsured/underinsured motorist coverage per person
  • $100,000 uninsured/underinsured motorist coverage per accident
  • $10,000 uninsured/underinsured motorist property damage coverage per accident
Washington
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
Washington D.C.
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $20,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • $5,000 uninsured/underinsured motorist property damage coverage per accident
West Virginia
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
Wisconsin
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
Wyoming
  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident



What Are Commercial Auto Cancellation & Nonrenewal Time Requirements?

Most states have enacted rules and regulations regarding the minimum amount of advanced notice an insurer must provide to an insured before cancelling or nonrenewing that insured's auto policy.

Different minimum times are allowed based on whether the cancellation is for reasons other than nonpay or if the cancellation is for nonpayment of premium. Nonrenewal may have its own separate set of standards and requirements.

Another item having a major impact is the method required for mailing or delivery of the cancellation or nonrenewal notice for the individual states.

The standards expressed below are the minimum set by each state. Exceptions or lesser amounts of time may be granted by some states under very specific circumstances, such as fraud or misrepresentation. Those specific exceptions are not referenced below:

ALABAMA
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: None stated
Type of Mailing Required: Proof of mailing of notice is sufficient.

ALASKA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 20 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 20 days
Type of Mailing Required: First Class Mail with Certificate
of Mailing

ARIZONA
Cancellation-Other than Nonpay, Time Required: 10 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Other than Nonpay needs Certificate of Mailing or Certified Mail; Nonpay needs First Class Mail
Nonrenewal, Time Required: 10 days except 45 days if insured had three or more at-fault accidents within a 36-month period
Type of Mailing Required: Certificate of Mailing or Certified Mail

ARKANSAS
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 30 days
Type of Mailing Required: May be delivered or use regular mail

CALIFORNIA
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Proof of mailing or delivery; delivery includes electronic transmittal, facsimile or personal delivery
Nonrenewal, Time Required: 30 days
Type of Mailing Required: May be delivered or use regular mail

COLORADO
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Only a proof of mailing is required

CONNECTICUT
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 10 days; 15 days for nonpayment of the first premium on a new policy
Type of Mailing Required: Whichever mailing method is used, a return receipt is required: Certificate of Mailing, Certified Mail, Registered Mail, or Delivered
Nonrenewal, Time Required: 60 days
Type of Mailing Required: Certificate of Mailing, Certified Mail, Registered Mail, or Delivered

DELAWARE
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certified Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Certified Mail

DISTRICT OF COLUMBIA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 30 days
Type of Mailing Required: Postal Receipt or Certified Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Postal Receipt or Certified Mail

FLORIDA
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Authorized U.S. Postal Receipt, Certified Mail, or Registered Mail
Nonrenewal, Time Required: 45 days
Type of Mailing Required: Authorized U.S. Postal Receipt, Certified Mail, or Registered Mail

GEORGIA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Authorized U.S. Postal Receipt
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Authorized U.S. Postal Receipt

HAWAII
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing

IDAHO
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Only a proof of mailing is required

ILLINOIS
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 30 days; 10 days for nonpayment of premium
Type of Mailing Required: Only a proof of mailing is required

INDIANA
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 20 days
Type of Mailing Required: Only a proof of mailing is required

IOWA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing

KANSAS
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing, Certified Mail, or Registered Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing, Certified Mail, or Registered Mail

KENTUCKY
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 14 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 75 days
Type of Mailing Required: Only a proof of mailing is required

LOUISIANA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Either deliver to insured or use Certified Mail
Nonrenewal, Time Required: 20 days
Type of Mailing Required: Either deliver to insured or Mail

MAINE
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing

MARYLAND
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certified Mail
Nonrenewal, Time Required: 45 days
Type of Mailing Required: Certified Mail

MASSACHUSETTS
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 20 days
Type of Mailing Required: Certified Mail or Registered Mail;
whichever mailing method is used, a return receipt is required
Nonrenewal, Time Required: 45 days
Type of Mailing Required: Certified Mail or Registered Mail;
whichever mailing method is used, a return receipt is required

MICHIGAN
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 20 days
Type of Mailing Required: Certified Mail
Nonrenewal, Time Required: 20 days
Type of Mailing Required: First Class Mail

MINNESOTA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 60 days
Type of Mailing Required: Only a proof of mailing is required

MISSISSIPPI
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing

MISSOURI
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Certificate of Mailing

MONTANA
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 45 days
Type of Mailing Required: Only a proof of mailing is required

NEBRASKA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certified Mail or Registered Mail
Nonrenewal, Time Required: 20 days
Type of Mailing Required: Only a proof of mailing is required

NEVADA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Personal Delivery to the Insured or First Class Mail or Certified Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Personal Delivery to the Insured or First Class Mail or Certified Mail

NEW HAMPSHIRE
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Deliver to the Insured or Mail
Nonrenewal, Time Required: 45 days
Type of Mailing Required: Deliver to the Insured or Mail

NEW JERSEY
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 15 days
Type of Mailing Required: Certified Mail or Proof of Mailing
Nonrenewal, Time Required: 60 days, but Commissioner may extend this up to an additional 30 days by regulation
Type of Mailing Required: Certified Mail or Proof of Mailing

NEW MEXICO
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Deliver to the Insured or Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Mail

NEW YORK
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 15 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 45 to 60 days; 20 days where vehicle is used for business purposes
Type of Mailing Required: Certificate of Mailing

NORTH CAROLINA
Cancellation-Other than Nonpay, Time Required: 60 days
Cancellation-Nonpay, Time Required: 15 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 60 days
Type of Mailing Required: Only a proof of mailing is required

NORTH DAKOTA
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 30 days; 10 days if a Certified Insurance Policy
Type of Mailing Required: Certificate of Mailing

OHIO
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: None stated
Nonrenewal, Time Required: 30 days
Type of Mailing Required: None stated

OKLAHOMA
Cancellation-Other than Nonpay, Time Required: None stated
Cancellation-Nonpay, Time Required: None stated
Type of Mailing Required: None stated
Nonrenewal, Time Required: None stated
Type of Mailing Required: None stated

OREGON
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Only a proof of mailing is required

PENNSYLVANIA
Cancellation-Other than Nonpay, Time Required: 60 days
Cancellation-Nonpay, Time Required: 15 days
Type of Mailing Required: Deliver to the Insured or Mail
Nonrenewal, Time Required: 60 days
Type of Mailing Required: Deliver to the Insured or Mail

RHODE ISLAND
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Certificate of Mailing
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Only a proof of mailing is required

SOUTH CAROLINA
Cancellation-Other than Nonpay, Time Required: 15 days
Cancellation-Nonpay, Time Required: 15 days
Type of Mailing Required: Deliver to Insured or Mail
Nonrenewal, Time Required: 15 days
Type of Mailing Required: Deliver to Insured or Mail

SOUTH DAKOTA
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 20 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 60 days
Type of Mailing Required: Only a proof of mailing is required

TENNESSEE
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Deliver to Insured or Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Only a proof of mailing is required

TEXAS
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Mail

UTAH
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: First Class Mail
Nonrenewal, Time Required: 30 days
Type of Mailing Required: First Class Mail

VERMONT
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 15 days
Type of Mailing Required: Certified Mail
Nonrenewal, Time Required: 45 days
Type of Mailing Required: Certified Mail

VIRGINIA
Cancellation-Other than Nonpay, Time Required: 45 days
Cancellation-Nonpay, Time Required: 15 days
Type of Mailing Required: Certified Mail or Registered Mail or Proof of Mailing
Nonrenewal, Time Required: 45 days
Type of Mailing Required: Certified Mail or Registered Mail or Proof of Mailing

WASHINGTON
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Only a proof of mailing is required
Nonrenewal, Time Required: 20 days
Type of Mailing Required: Only a proof of mailing is required

WEST VIRGINIA
Cancellation-Other than Nonpay, Time Required: 30 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Registered or Certified Mail
Nonrenewal, Time Required: 45 days
Type of Mailing Required: None stated

WISCONSIN
Cancellation-Other than Nonpay, Time Required: 10 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Deliver to Insured or First Class Mail
Nonrenewal, Time Required: 60 days
Type of Mailing Required: Deliver to Insured or Mail

WYOMING
Cancellation-Other than Nonpay, Time Required: 20 days
Cancellation-Nonpay, Time Required: 10 days
Type of Mailing Required: Deliver to Insured or Mail with Return Receipt
Nonrenewal, Time Required: 30 days
Type of Mailing Required: Deliver to Insured or Mail with Return Receipt


What Does Business Auto Insurance Cover & Pay For?

Commercial Auto Insurance Claim Form

Here are a few examples of commercial auto claims and how business auto insurance can help pay for the lawsuit:

  • Delivery truck accident: If a delivery truck owned by a business gets into an accident, causing damage to other vehicles or property, the business auto insurance can help pay for the damages and any resulting lawsuit.
  • Company car collision: If an employee driving a company car gets into a collision with another vehicle or causes property damage, the business auto insurance can help cover the damages and any legal expenses resulting from a lawsuit.
  • Food truck liability: If a customer gets sick after eating from a food truck owned by a business, and the customer files a lawsuit against the business, the business auto insurance can help cover any legal expenses incurred in the lawsuit.
  • Taxi accident: If a taxi owned by a business gets into an accident, causing bodily injury or property damage to a passenger or another driver, the business auto insurance can help cover the damages and any resulting legal expenses.
  • Construction vehicle accident: If a construction vehicle owned by a business causes property damage or bodily injury while working on a job site, the business auto insurance can help pay for the damages and any resulting lawsuit.

In all of these examples, having business auto insurance can provide protection and financial support in the event of an accident or lawsuit. It's important for businesses to have appropriate commercial insurance coverage to protect themselves from potential losses.

'Real Life' Court Cases Involving Business Auto Insurance:

Insurance Legal Cases
Seals vs. Erie Insurance Exchange

Stephen Seals was injured in an automobile accident while test-driving a car owned by Atlantic Motors (Atlantic). Atlantic's insurance company was Erie Insurance Exchange (Erie). Seals made a claim for underinsured motorist coverage under the Erie policy and Erie, in turn, filed a declaratory judgment action asking the court to determine if Seals was entitled to the coverage. The lower court found in favor of Erie. The Supreme Court of Virginia granted Seals an appeal.

The language of the policy's uninsured/underinsured motorist coverage endorsement provided: "We will pay, in accordance with the Virginia Uninsured Motorist Insurance Law, all sums that anyone we protect is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle." "Anyone we protect" was defined as "anyone else occupying a covered auto." "Covered auto" was defined as "a motor vehicle . . . with respect to which the bodily injury or property damage liability coverage of the policy applies."

To determine if the "bodily injury or property damage liability coverage of the policy applied," the lower court referenced the "Liability Protection" section of the policy. That section had its own definition of "anyone we protect," which stated: "The term 'anyone we protect' means any person or organization listed below . . . (2) Anyone else while using an auto we insure with your permission, except . . . (d) your customer who has other available insurance with limits at least equal to those required by law in the state where the auto is garaged."

Based on this language and the fact that Seals had "other available insurance with limits at least equal to those required by law in the state where the auto is garaged," the circuit court determined that Seals was not entitled to either liability or underinsured motorist coverage under the Erie policy. On appeal, Erie argued that Seals was not entitled to coverage under its policy because Seals was not occupying a "covered auto." Erie also argued that the Virginia Underinsured/Uninsured Motorists Statute did not require it to provide Seals with underinsured motorist coverage because Seals was not entitled to liability coverage under the Erie policy.

The Supreme Court of Virginia disagreed with both of Erie's arguments. In reaching its decision, the court first noted that Virginia's "garage keeper's exclusion" made it permissible for Erie's policy to exclude Seals from liability coverage. That statute provided, in pertinent part: "Each policy or contract of bodily injury or property damage liability insurance which provides insurance to a named insured in connection with the business of selling . . . motor vehicles, against liability arising from the ownership, maintenance, or use of any motor vehicle incident thereto, shall contain a provision that the insurance coverage applicable to those motor vehicles shall not be applicable to a person other than the named insured . . . if there is any other valid and collectible insurance applicable to the same loss covering the other person under a policy with limits at least equal to the financial responsibility requirements specified in [the relevant statutory provision]."

Because Seals had other insurance that met the statutory requirements, Erie's policy could exclude Seals from coverage.

The court next addressed the issue of whether or not the policy provided Seals with uninsured/underinsured motorists coverage. As a preliminary matter, the court noted that its finding that Seals did not have liability coverage under the Erie policy was irrelevant to the issue of whether he had uninsured/underinsured motorist coverage. It then focused on the language of the policy. The Virginia Supreme Court found that in reaching its decision the lower court had incorrectly relied on the "Liability Protection" section of the policy.

According to the Virginia Supreme Court, the "proper inquiry" was whether Seals was operating a "motor vehicle" . . . the "Autos We Insure" section of the policy, which provided: "The Declarations shows [sic] which of the following are autos we insure under this policy." The "Declarations" section of the Erie policy stated: "AUTOS WE INSURE: ANY AUTO-OWNED, HIRED & NON-OWNED AUTOS." The court concluded that because Seals was operating a vehicle owned by Atlantic, he was operating a "motor vehicle . . . with respect to which the bodily injury or property damage liability coverage of the policy applied." Thus, Seals was entitled to underinsured motorist coverage under the Erie policy.

The decision of the lower court was reversed.

(Seals vs. Erie Insurance Exchange-Record no. 081331-Supreme Court of Virginia-April 17, 2009-674 South Eastern Reporter 2d 860)

James David Miller and Magnum Plastics, Inc., Plaintiffs–Appellants, v. Hartford Casualty Insurance Company, Defendant–Appellee

In May 2002, a vehicle leased to Magnum Plastics, Inc. (Magnum) and driven by James David Miller was involved in an accident with a bicycle that resulted in the bicyclist's death. At the time of the accident, Magnum was insured under a commercial general liability policy issued by Hartford Casualty Insurance Company (Hartford) and an automobile policy issued by Progressive Insurance Company (Progressive).

Only the Progressive declarations pages were available. They revealed the following:

  • The policy provided the coverages the lease required.
  • Magnum was listed as the insured.
  • The vehicle was listed as an insured vehicle.
  • Miller was listed as a driver.
  • General Motors Acceptance Corp. (GMAC) was listed as the loss payee.

The policy did not describe either Magnum's or GMAC's interests in the vehicle. Miller may have been named as an additional insured on the auto policy but that was not clear based on the portions of the policy on the record.

The Hartford policy excluded bodily injury that arose from ownership, use, or entrustment to others of any automobile rented or loaned to the insured (the automobile exclusion). It also had an endorsement that partially restored coverage that stated the following:

"A. Under B., Exclusions, 1. Applicable to Business Liability Coverage [the automobile exclusion] does not apply to any 'auto' that is a 'non-owned auto.' A 'non-owned auto' is an 'auto' you do not own, including but not limited to: 1. An 'auto' that you lease, hire, rent, or borrow... "This does not include a long-term leased 'auto' that you insure as an owned 'auto' under any other auto liability insurance policy or a temporary substitute for an 'auto' you own that is out of service because of its breakdown, repair, servicing, or destruction."

The deceased bicyclist's heirs sued Magnum and Miller for negligence. In turn, they requested that Hartford provide defense and indemnification. Hartford denied coverage and refused to defend or indemnify. In order to limit their exposure, Magnum and Miller settled with the deceased bicyclist's heirs after notice to Hartford. They then sued Hartford, asserting claims for declaratory relief, breach of an insurance contract, and bad faith breach of an insurance contract.

Hartford responded by denying coverage based on the endorsement's exception. Both parties moved for summary judgment. The trial court granted Hartford's motion, concluding that it did not have a duty to defend or indemnify because the leased vehicle involved in the accident was not a covered vehicle. Magnum and Miller appealed.

On appeal, Magnum and Miller argued that the trial court erred in concluding that Hartford did not have a duty to defend. The appellate court noted that the duty to defend arises when the underlying complaint alleges any facts that might fall within the policy's coverage. The insurance company has the responsibility to establish that the policy does not cover the claims asserted in the complaint because they are "solely and entirely within the exclusions in the insurance policy' and they "are not subject to any other reasonable interpretations."

It then noted that the Hartford policy excluded coverage for "bodily injury...arising out the ownership...[or] use of any...auto...owned or operated by or rented or loaned to any insured." On this basis, the appellate court determined that Hartford did not have a duty to defend or indemnify Magnum and/or Miller.

Magnum and Miller then argued that the policy did not define "long-term" and that it was reasonable to believe that the vehicle was a long-term leased vehicle. The appellate court again disagreed, citing various sources that defined the term as being something that involved a number of years.

Magnum and Miller finally asserted that the phrase "insure as an owned auto" was ambiguous because it was subject to more than one interpretation. The court again disagreed. Hartford stated that the word "as" functions as a simile and means "after the manner of; the same as; like." In contrast, Magnum and Miller argued that, because Magnum had insured the vehicle as a leased vehicle instead of as an owned vehicle, it was reasonable to believe that this phrase did not apply to this situation.

The court noted that the record did not offer anything to support that assertion. However, even assuming that it was true, because a leased vehicle, by definition, is not an owned auto, it agreed with the Hartford definition as the only logical one.

To summarize, the appellate court ruled that the vehicle was a "long-term leased auto" within the meaning of the insurance policy's exclusion and the vehicle was insured "as an owned auto" within the meaning of the insurance policy's exclusion. It affirmed the trial court's decisions.

(Colorado Court of Appeals, Div. 1. James David Miller and Magnum Plastics, Inc., Plaintiffs–Appellants, v. Hartford Casualty Insurance Company, Defendant–Appellee. No. 05CA2412. April 5, 2007. 160 P.3d 408)


Additional Resources For Commercial Auto Insurance

Learn about small business commercial auto insurance which includes liability and physical damage protection for vehicles that are used for business purposes.


Commercial Vehicle Insurance

Commercial auto insurance is a type of insurance that provides coverage for vehicles used for business purposes. This includes vehicles such as delivery trucks, company cars, and other vehicles that are used to transport goods or employees.

Commercial auto insurance is necessary for businesses that rely on their vehicles to conduct their operations. It helps to protect the business from financial losses due to accidents, theft, or other unexpected events. It also helps to protect the business from potential lawsuits that may arise from accidents involving their vehicles.

There are several types of coverage options available under business auto insurance policies. These include:

  • Liability coverage, which covers damages or injuries that you or your employees cause to others while operating a business vehicle.
  • Physical damage coverage, which covers damages to your own vehicle, is also available.
  • Other coverage options may include medical payments, uninsured or underinsured motorist coverage, and rental reimbursement.

It is important for businesses to carefully consider their commercial auto insurance needs and to choose a policy that offers the right level of coverage. This can help to ensure that the business is protected in the event of an accident or other unexpected event.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Motor Truck Cargo, Valuable Papers and Records, Employee Dishonesty, Money and Securities, General Liability, Employee Benefits, Umbrella, Motor Carriers Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.

Other commercial insurance policies to consider: Earthquake, Flood, Mobile Equipment, Signs, Warehouse Operators' Legal Liability, Cyber Liability, Employment-related Practices, Environmental Impairment, Underground Storage Tank, Stop Gap Liability and International Coverages.


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