Commercial auto insurance policies have exclusions, just like personal auto insurance policies do. The commercial policies are different from those of personal policies, and they may have far-reaching implications for your business. Below are some of these exclusions.
As an employer, you owe your workers some compensation (such as medical benefits or lost wages) if the employees are injured on the job. For example, if your delivery truck is involved in an accident, the truck driver should get these benefits. However, it is your worker's compensation insurance, and not your commercial auto insurance, that will compensate the truck driver. Commercial auto insurance excludes damages arising out of worker's compensation claims.
Your commercial auto insurance will also not cover liabilities that your employees might claim against each other after an auto accident. For example, if one of your drivers knocks over a co-employee in the parking lot, your commercial auto insurance policy won't cover the ensuing damages. This is just the same way your personal auto insurance policy won't kick in if a member of your household files a claim against another member of the same household.
Damage to Cars Under Your Custody
Your auto insurance company will also exclude damages that occur to cars under your control or custody, even if you don't own the cars. The cars under your control are given the same treatment as the cars you own. For example, if your business rents a car and it gets damaged, your commercial auto insurance won't cover the damages.
Damages Related to a Crime
Your insurer is unlikely to settle damages arising out of the commission of a crime. Say one of your employees was transporting illegal drugs with a company car. If the employee gets involved in an accident, the insurance might not cover the damages since the employee was breaking the law at the time of the accident.
Damages by Employee Relatives
Your commercial auto insurance company calculates your premiums by evaluating the risks your business' cars face. Your drivers' profiles are one of the risks the insurer will evaluate. When an employee's relatives drive these cars, they expose your business and insurer to unknown risks. Therefore, your auto insurance company is unlikely to compensate for damages caused by employees' relatives.
As you can see, your auto insurance company does not cover every imaginable damage your business' cars might experience or cause. Talk to your auto insurance agency for further clarification on what is covered or excluded. An agent can also advise you on whether and how you can get coverage for the excluded risks.