Should You Increase Your Liability Coverage on Your Commercial Auto Insurance Policy?
Nearly every state requires nearly every driver to have auto insurance. For businesses that own vehicles, this will mean investing in commercial auto insurance. Regardless of whether you are a private or commercial driver, the requirement is likely the same; you must carry minimum levels of liability insurance. Drivers who fail to carry this minimum coverage will not have the protection they need to drive legally.
However, even though your state will likely require minimum levels of coverage, that doesn’t mean you shouldn’t carry more of it. After all, the more liability insurance you have, the better your business will be able to weather the storms of at-fault accidents.
The Importance of Carrying Auto Liability Insurance
When you have a car wreck, most states require the authorities to determine whose fault the accident was. After this determination is made, the at-fault party must pay both for their own losses and the damage that they caused others. For example, if you are at fault for a two-car accident, then you will have to pay for the property damage and injuries that you have caused the other driver.
When a driver operating on behalf of your business causes an accident, then your business is legally entangled in the results. This accident was caused by your business’s representative, and therefore the business might have to compensate the other driver. Furthermore, if the other party sues you, then your business might have to fight back against the suit.
In both scenarios, your liability insurance will make certain that you have the financial resources. Therefore, you won’t have to pay critical commercial assets out just to cover your own mistakes, which could greatly stabilize your company’s financial future.
Choosing the Coverage That is Best for You
You must carry the minimum auto liability insurance that is required for commercial drivers in your state. Sometimes, these will differ from the minimum limits required of private drivers.
However, once you have met these limits, it is wise to consider increasing them. Most commercial auto policies offer higher liability coverage options than just the minimum amounts. With higher benefits, you will be able to receive more financial assistance for an at-fault accident claim. This can come in handy if someone sues you for a significant amount of money that a minimum policy will not cover. Any increase in your premium from this increased coverage will be far less than the benefit provided by a high payout.
Additionally, consider investing in commercial umbrella insurance to further increase your auto liability coverage. Umbrella plans will provide additional third-party benefits once a claim surpasses the maximum amount of money that your standard liability policy will pay. That way, you’ll have additional perks available in a worst-case scenario.