Considerations for Commercial Auto Insurance Coverages

by Ed Sneneh, Chicago Commercial Auto Specialist


Protection for liability loss exposures connected to using autos and trucks is part of the commercial auto coverage. The liability section of the commercial auto contracts mandates the insurer to pay all damages the business owners are legally required to pay because of bodily injury or property damage resulted from an accident and resulting from the ownership, maintenance or use of a covered auto. Of course the coverage will be up to the auto policy limits specified on the declarations pages.

The beginning point is a professional Insurance broker,  one who puts the efforts and who takes the time to analyze your business operations. Stay away  of an insurance broker who, without knowing the details of your business, tries to market to you some package contract, without looking at other alternatives. The insurance industry has developed some very good packages that cover the basic needs of many trucking businesses. Your insurance broker must ask a lot of questions and systematically comprehend your industry and operations. You should always insist on having someone who is capable of knowing your needs.

Independent insurance brokers can be of further help here.  You want a broker  who’s not a captive/ hostage to a particular company. The broker should be willing to obtain quotes from many insurance companies so that you do not pay more than is necessary. He/ she should also have knowledge and understanding of precisely what your insurance policy covers and what is not covered. 


Punitive Damage Are Not Covered Under Auto Insurance. In some of states, the auto contract is not permitted to cover punitive damage awards. But then even in states where insurance for punitive damages is allowed, the auto insurance contract may exclude them specifically. Punitive damages are occasionally imposed when their is sever recklessness or alcohol consumption where the operator  was drunk or was operating a vehicle recklessly.

Any time there are auto liability lawsuits against the insured business, where the loss is covered by the policy, the insurer is mandated to defend the business, its owner, and it staff; or to settle the lawsuit. Insured cannot decide here. The policy leaves the decision up to the insurer about whether to defend or settle a particular lawsuit. The insurance company's obligation to defend or settle will surely finish  when the insurance policy limits have been exhausted by the payment of judgments or settlements. For example, if 2 people are injured in an auto crash, and the insurance company uses up the policy limits in lawsuits or out-of-court settlements on the first one, the business will have to pay the cost of the judgment, if any, to the second injured party.