A plumbing company in Sanford sends a technician to a service call in a company van. On the way, he runs a stop sign, hits a sedan and pushes it into a mailbox and a parked car. The sedan’s driver is hurt, the van’s front end is crushed, and the technician’s tools are scattered across the intersection. Within an hour the owner has four questions: who pays for the injured driver, who pays for the other cars, who pays to fix the van, and what happens to the tools.
A business auto policy answers some of those questions and not others. Knowing which coverage responds to which part of a loss, before it happens, is what lets an owner build a policy that actually fits the way the business uses its vehicles.
Liability Coverage
Liability is the heart of a business auto policy. It pays for bodily injury and property damage that your business is legally responsible for when one of your covered vehicles causes an accident, and it pays for the cost of defending the business if it is sued. In the Sanford example, the injured driver’s medical bills and lost wages beyond what her own coverage pays, the damage to her car, the mailbox and the parked car would all fall under the van’s liability coverage.
Liability is usually written as a combined single limit, one amount that applies per accident to injuries and property damage together. That limit is the most important number on the policy, because a serious injury claim can exceed a low limit quickly, and whatever the policy does not pay becomes the business’s problem.
Personal Injury Protection and Medical Payments
Florida is a no-fault state, so business vehicles registered here carry personal injury protection, which pays a portion of medical expenses and lost income for injured occupants regardless of who caused the accident. Many policies also offer medical payments coverage, which can help with expenses PIP does not cover. These coverages protect the people in your vehicles, including your employees, though an employee hurt on the job is generally handled under workers’ compensation first.
Physical Damage: Collision and Comprehensive
Physical damage coverage pays to repair or replace your own vehicles. Collision covers damage from hitting another vehicle or object, or from a rollover, so it is what fixes the plumbing van’s front end, less the deductible. Comprehensive covers damage from almost everything else: theft, vandalism, fire, falling objects, flood and windstorm. In Florida, comprehensive is the coverage that responds when a hurricane floods a parking lot full of service vans.
Physical damage is optional unless a lender or lessor requires it, and it is common to carry it on newer or financed vehicles and drop it on older ones. Each vehicle can be set up differently on the same policy.
Uninsured Motorist Coverage
Uninsured and underinsured motorist coverage pays for injuries to your drivers and passengers when the at-fault driver has no insurance or not enough of it. Florida has a large number of drivers carrying low limits or none at all, so this coverage is worth a careful look, even though businesses can choose to reject it in writing.
Who and What Is Covered: Symbols and Drivers
Business auto policies use coverage symbols to define which vehicles each coverage applies to. A policy might cover any auto for liability, only scheduled autos for physical damage, or only owned autos for certain coverages. The symbols are easy to overlook and they decide whether a newly purchased truck, a rental or an employee’s car is covered on the day of an accident, so they should be reviewed whenever the fleet changes.
The policy also covers permitted drivers, including employees driving within the scope of their work. Carriers expect to know who those drivers are, and anyone driving regularly should be listed and approved.
Hired and Non-Owned Autos
Liability for vehicles your business does not own, such as rentals and employees’ personal cars used for errands or site visits, is handled by hired and non-owned auto coverage. It can be added to a business auto policy, and it is essential for any company whose employees ever drive their own vehicles for work. Our guide to hired and non-owned auto insurance in Florida explains how it works and when it is written as a standalone policy.
Common Additions Worth Considering
Several optional coverages fill gaps that come up often. Rental reimbursement pays for a substitute vehicle while a covered vehicle is being repaired after a physical damage loss, which matters for a business that cannot afford to lose a truck for two weeks. Towing and labor coverage helps with roadside costs. Gap coverage can pay the difference between a vehicle’s value and what is still owed on a loan or lease after a total loss. Additional insured and waiver of subrogation endorsements are often required by contracts, and the policy should carry them before the work starts.
What It Does Not Do
A business auto policy is built around vehicles, and it does not cover everything that rides in them. Tools and equipment are usually excluded and belong on an inland marine policy, and cargo carried for others needs its own coverage. Our article on what business auto insurance does not cover in Florida walks through those gaps. In the Sanford example, the scattered tools would only be covered if the company carried a tools and equipment policy.
If you are still deciding whether your vehicles belong on a commercial policy at all, our guide on whether you need commercial auto insurance in Florida is a good starting point.
Worth Confirming With Your Agent
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Your liability limit and whether it meets your contracts and certificate requests
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Which coverage symbols apply to liability and physical damage, and whether new vehicles are covered automatically
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Which vehicles carry collision and comprehensive, and at what deductibles
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Whether uninsured motorist coverage was accepted or rejected
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Whether hired and non-owned auto coverage is on the policy
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Whether tools, equipment and cargo are covered somewhere else
Talk to Prestige Insurance Group
Prestige Insurance Group builds business auto programs for contractors, service companies and small fleets across Florida, and we review coverage the way a claim would test it. If you are not sure what your current policy would pay in an accident like the one above, we can go through it with you and show you where the gaps are.
Call the office nearest you. Se habla español.
Orlando: 407-993-2331
Miami: 305-969-8776
Stuart: 772-247-3788
Prestige Insurance Group, License L057894
