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Tennessee Commercial Auto Insurance

Coverage for Commercial Autos, Vans, Trucks, Trailers, and Fleets                      
  Tennessee requires you to purchase liability insurance for bodily injury and property damage that may occur while you or one of your employees is operating a company vehicle.  Tennessee also requires you to have uninsured/underinsured motorists coverage and/or medical payments coverage (known as Personal Injury Protection (PIP) in some states). You can also purchase physical damage coverage for vehicles your business owns, leases or hires.

Your Business Owners Policy (BOP) does not provide any coverage for vehicles, so you must have a separate policy.  Commercial auto insurance can provide coverage for a combination of drivers and vehicle types (cars, trucks), in addition to some types of motorized equipment.

Do I need a Commercial Auto Insurance policy?

As a Tennessee business owner, you need the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel -- liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists.  In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the policy as the "principal insured" rather than your name.  This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.

In general, you have three options for which vehicles you choose to cover.

Most businesses should buy the third type, since that is the only coverage that protects the business from liability when an employee or owner is driving a personal vehicle on business.

Be Sure The Right Insured Is On The Policy
An insurance contract usually requires that the owner of a vehicle be named in the policy "Declarations" as the “principal insured.” If you drive any of the same vehicles for both business and pleasure, make sure you tell us who holds the vehicle’s title, you personally or your company. This will avoid problems if you need to file a claim or a claim is filed against you.

Physical Damage Coverage
The three types of physical damage coverage for motor vehicles are collision, comprehensive and specified perils. If your business has a large fleet of vehicles, over time, it may be more costly to insure the fleet for physical damage than it is to retain the risk, that is, pay for any physical damage directly rather than by insurance.  Regardless of how many vehicles your business has, it may be cost effective to carry physical damage coverage only on the newer or move valuable vehicles.

How much Liability Coverage does my Business need?
Many insurers recommend a business auto coverage llimit of $1,000,000, with $500,000 as the minimum.  The higher limit does not add a great deal to the premium, considering the amount of additional protection it provides. 

Does a Business Umbrella cover autos?
If you have a business umbrella policy, it would provide protection for owned, hired and non-owned autos, if the umbrella shows the auto liability policy as an underlying policy for which it provides coverage. 

What coverage do I need if my employees use company vehicles for personal business?
Some businesses let employees drive company vehicles home and use them for personal purposes in the evenings or on weekends. So long as these vehicles are scheduled on your business auto policy and the appropriate “coverage auto symbols” are shown on the "Declarations" page, you have coverage for owned autos taken home by employees. 

What coverage do I need if employees drive their personal vehicles on business?

If your employees drive their own cars for business purposes—to visit clients, for example—your business could wind up liable for property damage and bodily injuries resulting from a traffic accident for which an employee was at fault.  To protect your business from these liability risks, you can add the Non-owned Auto liability Endorsement to your BACF.  It provides coverage when employees drive their own vehicles on business.  This BACF coverage is excess over the limits provided by the employee's limits are low-such as only to satisfy state financial responsibility limits-then it is critically important for the business to have this non-owned auto protection.  For more information on reducing the risk of auto accidents, click here.

Source: Information Insurance Institute                                  

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