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5 Tips for Minimizing Your Commercial Auto Insurance Cost in Light of COVID-19

5 Tips for Minimizing Your Commercial Auto Insurance Cost in Light of COVID-19

Commercial auto insurance is important for nearly every business that owns vehicles and is mandatory in most states. Any time an employee is on the road in a company vehicle, there is a risk of being involved in an accident. And that risk may be elevated today during the pandemic, with drivers being a little “rusty” regarding safe driving practices. Even the most minor of incidents caused by someone you employ can cost your company many thousands of dollars. Should a serious injury or fatality occur, the commercial auto insurance cost could be in the hundreds of thousands or more.

You Can Be at Risk

Commercial auto insurance includes different types of coverage that can protect your business from the liability and expense associated with many risks.

Examples of risks

Some of these risks include:

  • Bodily injury—This is coverage for situations where someone is injured or killed as a result of an accident for which you or your employee is at fault. It may include legal defense expenses depending on the type of policy purchased.

  • Property damage—If a covered driver in your vehicle accidentally damages another person’s vehicle or property, this aspect of your policy can protect you. Here again, coverage may include legal defense costs.

  • Medical payment, no-fault, or personal injury—This coverage provides payment for the medical expenses of an employee or a passenger traveling in your vehicle, regardless of who is at fault in an accident.

  • Uninsured motorist—This policy provision pays for medical expenses, or in some cases property damage, caused by a hit-and-run driver or an uninsured driver. Underinsured motorist coverage may also be included depending on the type of policy. This is for when the at-fault driver has insurance, but it’s not sufficient to cover the costs of an incident.

  • Comprehensive physical damage—This is coverage for vehicles or trailers on your policy for damage caused to them by something other than a car accident. Examples include damage resulting from theft, vandalism, flood, fire, and other specified hazards.

  • Collision—This is payment for damage to vehicles or trailers on your policy caused by a collision with another vehicle or a single-car accident.


These coverages can apply to a variety of vehicle types such as:

  • Cars

  • Limousines

  • Pickup trucks

  • Buses

  • Truck tractors

  • Food trucks

  • Motorcycles

  • Delivery/cargo vans

  • SUVs

  • Tow trucks

  • Passenger vans

  • Box trucks

  • Flatbed trucks

  • Dump trucks

  • Dry van trailers

  • Refrigerated trailers

Properly protecting your vehicles is a wise business decision. And while there is a cost associated with investing in insurance coverage, there are steps you can take to minimize this expense.

Promote Safe Driving and Lower Your Commercial Auto Insurance Cost

One of the primary factors an insurance company considers in determining your commercial auto insurance cost rate or premium is your claims history. Not surprisingly, the more claims you have, the higher your rate is likely to be. Consequently, any time and effort you put into preventing accidents are saving you money in the long run.

Below are five steps you can take to create and maintain a focus on safe driving at your company. They can be especially beneficial in the wake of the pandemic. There is never a good time for a vehicle accident, but for companies that have seen their revenues drop in the last few years, it is crucial that drivers avoid incidents.

1. Document and promote your safety rules.

Every employee comes to your organization with different driving experiences and habits. Defining your expectations for how company vehicles should be driven helps get everyone “on the same page” about safe driving practices. This guide should be required reading for all new employees, and safe driving should be a frequent topic at company meetings.

You may also want to consider telematics—having a device in the vehicle or an app on the employee’s phone that produces a log of the person’s driving behavior and adherence to your standards. In addition, it can be helpful to offer incentives for safe driving habits and also to explain the disciplinary actions that are taken when someone violates the rules.

2. Check job applicant driving records.

If someone has a history of traffic offenses and accidents, that behavior can increase the risk of a vehicle incident. Get a report from the Department of Motor Vehicles and review it carefully. You will probably need the employee to sign a release authorizing you to obtain that information. You should also check the driving record of an existing employee who is changing roles and will now have driving responsibilities.

3. Provide training on safe driving practices.

Training helps employees see how the rules outlined in your safe driving guide come into play in the real world. Whether you conduct live sessions, provide access to online training, or both, initial instruction and refresher sessions are very valuable.

4. Purchase vehicles with good safety records.

Some vehicles have more accidents than others. Vehicle design, the presence or absence of safety features, and other factors play a role. Do your research before purchasing vehicles for your company. Also, consider including optional features that will help drivers operate your vehicles more safely.

5. Make a firm rule regarding calling or texting while driving.

Distracted drivers are much more likely to be involved in a motor vehicle accident. As part of your safety guide and any training you provide, calling and texting while driving should be strictly prohibited. That includes creating awareness throughout your organization of when employees will be on the road. This also requires that others avoid trying to contact them during that period.

Maintain Ample Insurance at an Affordable Rate

For many small businesses, one significant vehicle accident can threaten the company’s financial stability. Fortunately, having the right amount of commercial auto insurance coverage can provide protection from the unexpected.

Considering the high cost of liability lawsuits, and state requirements for coverage in most cases, that protection is a valuable asset to your company at any rate. But by taking steps to protect your drivers—and by extension, the people they encounter on the road—you can help lower your risk and your rate.

Rakesh Gupta - chief operating officer at biBERK

Rakesh Gupta is chief operating officer at biBERK, part of Warren Buffett’s Berkshire Hathaway company. biBERK specializes in commercial insurance for small businesses. In his role, Gupta focuses on simplifying the insurance buying experience. He incorporates technology and process innovations that make it easier for small business owners to get the coverage they need.

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Source: Smart Hustle