Virginia business owners or employees who need to regularly use their personal vehicles for work should consider a commercial auto insurance policy to protect the organization and save money on taxes.
Virginia’s financial responsibility law requires businesses to show they can pay for any damage and losses caused by vehicles used in connection with the business, according to the Virginia Corporation Commission. The easiest way to protect your business is with a commercial auto insurance policy, though it’s not required in the state of Virginia.
What is commercial auto insurance?
Commercial auto insurance, also referred to as business auto insurance, is an auto insurance policy designed for vehicles that are used by and for business purposes. These insurance policies can protect your employees and other motorists if there’s an accident or even if a vehicle is damaged while it’s not in use.
Commercial car insurance premiums are expensive, but they are tax-deductible. That means your premiums can be written off as a business expense when you pay your taxes.
How is business auto insurance different from personal auto insurance?
Many business owners assume that their personal auto insurance policy will cover them if they’re in a wreck, but that’s not always the case.
Business auto insurance policies usually offer much higher liability limits than personal auto insurance policies.
You can also write off your commercial auto insurance premiums as a business expense, which usually isn’t possible with personal auto policies.
What does commercial auto insurance cover?
Commercial auto insurance can cover a range of vehicles used for business such as delivery trucks, work vans, construction vehicles, food trucks, and standard company cars.
Injury and property damage liability coverage
Commercial auto insurance policies in Virginia need to cover damage and injuries caused by you or your employees in a wreck. Liability coverage covers medical expenses for motorists, regardless of who is at fault in a wreck, as well as legal fees if your company gets sued.
Uninsured/underinsured motorist coverage
Virginia also requires commercial auto insurance policies to protect you if you’re involved in a hit-and-run or another party doesn’t have enough insurance to cover damages.
Comprehensive coverage
A commercial auto insurance policy can also pay for damage from theft, vandalism, extreme weather, or fires. Virginia businesses do not need comprehensive coverage, but it can provide important protection.
Your commercial auto insurance policy may also offer coverage for towing, roadside assistance, and rental vehicle fees if your vehicle becomes temporarily unavailable.
Virginia commercial auto insurance policy requirements
To meet the requirements of Virginia’s financial responsibility law, a commercial auto insurance policy must meet the following criteria:
- A minimum of $25,000 of coverage for the injury or death of one person
- A minimum of $50,000 of coverage for the injuries or deaths of two or more people
- A minimum of $20,000 of coverage for property damage
Business owners can also choose to pay Virginia’s Uninsured Motorist Fee to the Department of Motor Vehicles. The fee does not provide insurance but allows you to operate an uninsured vehicle at your own risk.
What’s not included in a commercial auto insurance policy?
Tools and equipment stored in the vehicle aren’t covered by commercial auto insurance, but they may be covered by your business insurance policy.
Your commercial auto insurance policy also won’t cover punitive damages as a result of negligent driving. That means if you or an employee were driving drunk or driving recklessly and gets in a wreck, your insurance company won’t pay for expenses that are meant to punish a negligent party.
How much is Commercial Auto Insurance in Virginia?
According to Car and Driver, the annual cost of commercial auto insurance for a standard vehicle used for business is $600-$2,400. Cargo vans and delivery vehicles are more expensive, usually costing about $3,300-$6,200 per year.
Commercial auto insurance costs vary based on the amount of coverage you have, the number of vehicles covered by the policy, and the type of vehicles on the policy. Premiums can also depend on how risky your industry is (such as construction or demolition), the driving history of the driver, and other perks included in the policy.
Popular discounts for commercial auto insurance
Insurance providers understand the business insurance costs can add up fast. Ask your insurance provider if they offer the following discount options:
- Fleet insurance for businesses that need to insure a large number of vehicles
- Commercial Driver’s License Discounts
- Experienced business discounts for established companies who have been in business for awhile
- Prior insurance discounts if you’ve had continuous coverage on your vehicles
- Paid in full discounts for paying your premiums annually rather than monthly
Commercial auto insurance FAQs
What if my employee keeps the car at their house?
Tell your insurance provider if an employee keeps a company-owned vehicle on their property. It will likely still be covered under the commercial auto policy, but you’ll need to include the proper information in the declarations section of your policy.
What happens if my employee gets into a wreck using the work vehicle to run a personal errand during the work day?
If your work vehicle is scheduled on your business auto policy and you properly declare that employees may use the vehicle for personal use, your vehicle is covered by the business auto policy.
What if my employees are using their personal vehicles for work purposes?
A Non-owned Auto Liability Endorsement can be added to your policy to cover employees who use their personal vehicles for work purposes.
Do I need commercial auto insurance if I'm a delivery driver or rideshare driver using my own vehicle?
No. You will want a specific courier/delivery driver insurance policy.
Ronnie Shriner Insurance Agency is proud to work with Virginia business owners
Ronnie Shriner Insurance Agency has proudly served business owners in the Richmond, Virginia area since 1989. Based in Glen Allen, we specialize in tailored insurance plans based on each business’s specific needs, and we’re happy to help you select the commercial auto insurance option for you.
Click here to contact us online, or email info@shrinersinsurance.com. You can also call our office at 804-270-0406.
