Liability auto insurance for business owners is an important part of a commercial policy. It protects the company’s assets if the owner or an employee is involved in an at-fault accident.
Third party liability coverage is required in most parts of the United States. Each state sets minimum coverage requirements for bodily injury and property damage insurance. The bodily injury part of the policy pays for personal injuries and economic losses claimed by the people traveling in the other vehicle when an accident occurs. It also pays a funeral benefit, if the accident was a fatal one.
Property damage liability insurance covers the cost of repairing the other driver’s vehicle. If the car is totaled in the accident, the insurer will make a payment based on its cash value. The property damage part of the policy also pays for repairs to public property damaged or destroyed in the accident, including sign posts, guard rails and fences.
The exact level of liability auto insurance business owners should have in place will depend on the level of assets the business needs to protect. It’s a good idea to have at least $100,000 in liability coverage in effect, and a number of business owners choose to buy a policy with a limit of up to $1 million per occurrence. For business owners who currently have a policy in place, reviewing the policy provisions at least once a year will help to ensure that the right level of protection is in place.