Commercial auto insurance in Calgary is necessary if you or your employees use the vehicle for business purposes, such as transporting goods, animals or people, or if you provide a service using the vehicle. Likewise, heavy-duty vehicles used for business operations will need to be insured with commercial insurance. Commercial auto policies typically include the following type of coverage:
- Third-party liability insurance
- Accident benefits coverage
- Public liability and property damage/PLPD coverage
- Collision coverage
- Comprehensive coverage
- Specified perils insurance
- Loss of use insurance/SEF 20
- Rental vehicle insurance/SEF 27
- Accident forgiveness/SEF 39
Third-Party Liability Policy
As part of any mandatory car insurance policy, third-party liability coverage protects you from damage to another person or their property while driving your vehicle. An example of this could be if you're delivering flowers and rear-end another driver on your way to a client. The third-party who you collided with may file a claim against you. Third-party auto liability insurance ensures you don't have to pay out-of-pocket for any damage caused by the collision or the medical expense for anyone you injured. It will also protect you against legal expenses and legal action as a result of the incident.
Accident Benefits Coverage
Also considered mandatory insurance, accident benefits protect the driver and passengers of a vehicle involved in a collision—regardless of who is at fault. In this way, accident benefits differ from third-party liability. It typically covers:
- Medical expenses for treatment due to an injury
- Essential medical supplies
- Essential medical services
- Wage loss coverage
Public Liability and Property Damage Liability/PLPD Coverage
Typically, public liability and property damage insurance protect you should you be the at-fault party in an accident. Whether you hit another vehicle, a person or an inanimate object like a road sign, if you're at fault for a traffic accident, this makes you liable for any damage caused. Also referred to as bodily injury and property damage, this policy is fundamental coverage for all vehicle insurance policies. It can be broken down into two parts:
- Public Liability—which covers injuries you cause to other people.
- Property Damage—which covers damage to personal or public property caused by your vehicle, including vehicle damage to the other car involved in the incident.
Collision Insurance
Unlike third-party liability and accident benefits coverage, collision insurance is not considered mandatory in Alberta. However, if you rely on your vehicle for business reasons, it's imperative that you protect it with both collision insurance and comprehensive insurance—which is detailed below.
Collision coverage protects your vehicle from accidents. Typically, mandatory insurance doesn't actually protect your vehicle, but losses or damage to other people, cars and objects, as well as medical expenses for others. Contrarily, collision coverage pays for damage to your vehicle caused by a rollover or collision with another vehicle—even if you're at fault.
Comprehensive Insurance
Another optional coverage, comprehensive insurance, essentially protects your vehicle from all manner of risks, including:
- Theft
- Hail
- Vandalism
- Fires
- Animal collisions
- Other non-driving-related damage
Especially if you're using your truck or van for business reasons, like selling coffee or transporting equipment, it can be devastating if you hit a deer or someone steals your vehicle, and you're not covered. This policy will cover the cost of repairs or replacements if needed.
Specified Perils Insurance
As implied by the name, specified perils coverage protects you against specific events (perils) that are outlined in your policy. It's important that you read over your policy so you're familiar with what is covered under specified perils insurance and what is not, in case the vehicle you use for business activities is affected. Typically, this coverage will include damage caused by:
- Fire
- Hail
- Lightening
- Theft
- Earthquakes
- Floods
Loss of Use Insurance/SEF 20
If your vehicle is in an accident or is otherwise damaged, it will need to be repaired promptly. Yet, this may leave you worried that you won't be able to continue your business activities while your car is out of commission. Loss of use insurance, also called SEF 20 on your policy, provides for reasonable expenses incurred for a rental vehicle or other mode of transportation while your vehicle is in the shop. Essentially, your insurer will provide for you to rent a replacement vehicle similar to the one being repaired up to the coverage limits declared on your policy. Keep in mind that if your vehicle is specifically tailored to your uses, such as a food truck, replacing your van with a rental may not be feasible.
Rental Vehicle Insurance/SEF 27 or Hired and Non-Owned Auto Coverage
This optional coverage extends the physical damage coverage you already have on your vehicle to a rental vehicle you use while away on business. It's also known as hired and non-owned auto coverage and can be used to cover vehicles your business uses but does not own—like employee-owned vehicles used for business reasons and vehicles leased by your business. The same physical damage deductibles that you have on your current vehicle are reciprocated on the rental vehicle. If you or your employees occasionally use personal vehicles for business reasons, you may want to invest in Hired and Non-Owned Auto Coverage. It's important to talk to a qualified insurance agent at Krywolt Insurance so you know whether this add-on is beneficial for you.
Accident Forgiveness/SEF 39
This endorsement is ideal for protecting drivers from the negative impacts of their first accident. Even if you are a defensive driver and have a clean driving record, sometimes accidents happen. It's with this line of thought that insurance companies developed the accident forgiveness endorsement. Should you find yourself in an accident, this coverage acts as if it never happened in the first place. Basically, it offers a do-over—instead of facing the negative ramifications of being in an accident and watching your insurance premiums skyrocket.
Does Commercial Automobile Insurance Cover Your Employee's Personal Vehicles or Your Own?
Commercial auto insurance does not provide any coverage for personal vehicles—those would require a personal auto insurance policy. If you supply a company vehicle to your employees, this is a different matter. Also, if you or your employees use personal vehicles for business purposes, you may want to consider adding hired and non-owned auto insurance to your policy.
Does Commercial Auto Coverage Include Vehicles Used for Personal Use?
No. A commercial automobile insurance policy is intended for vehicles used for business and commercial purposes. However, if you also use the same vehicle for personal reasons—say you work as a handyman and only have one truck—then you may also be covered for personal use. Talk to your broker to ensure you have appropriate coverage based on the various uses of your vehicles.
Does My Small Calgary Business Need Commercial Auto Insurance?
Suppose you're a business owner and you use a vehicle for business-related purposes. In that case, you will most likely need commercial auto insurance, especially if your employees also use the vehicle. Say you own a bakery, and you have an employee who delivers cupcakes throughout Calgary; it's important that your vehicle is fully insured and your employee is listed as one of the vehicle's drivers.
What Types of Vehicles are Covered by Commercial Auto Insurance?
Essentially, any vehicle that is used for commercial or business purposes is covered by business auto insurance. This includes:
- Buses/transport vehicles
- Trucks, including semi-trucks, food trucks, box trucks and pickup trucks
- Vans, including delivery vans
- Taxi and rideshare vehicles
- Service utility vehicles
- Company cars used to visit clients or business locations
- Other business vehicles, such as farming equipment
What's the Difference Between Commercial Auto Insurance and Fleet Insurance?
The biggest difference between these two very similar types of commercial auto insurance in Calgary is that commercial auto insurance is a policy that offers insurance protection for one single vehicle, while fleet insurance covers five or more commercial vehicles under a single fleet insurance policy. Both commercial auto insurance and fleet insurance are for vehicles that are owned by companies or self-employed contractors and used for commercial business purposes.
Are Commercial Auto Insurance and Garage Liability Insurance the Same Thing?
While the names are similar, these two coverages are not the same. Garage liability insurance is a type of coverage that is necessary for auto repair shops, auto detailers, parking garages and other types of businesses that must keep customer's vehicles on their commercial property in order to provide their services. It is a type of umbrella liability coverage that applies to litigation and settlement costs related to damage or injury that occurs over the course of daily operations for that business.
What Doesn't Business Auto Insurance Cover?
The level of coverage you have for your business vehicle is up to you. While third-party liability and accident benefits insurance are mandatory, most additional coverage options can be added on to provide you extra protection. There are a number of potential exclusions that may or may not apply to your particular policy, depending on your insurance company and how your unique policy is written. Some common exclusions are:
- Litigation that results from intentional damage or injury
- Damage or injury that results from racing
- Pollution from pollutants that are being transported in your vehicle or that come from the vehicle itself
- Damage resulting from war, insurrection, rebellion, and in some cases, rioting or civil unrest
The best way to establish what level of coverage you need is to talk to one of our qualified insurance brokers. We'll look at what you're using the vehicle for, how many other drivers use the vehicle, and what kind of vehicle you drive to establish what needs to be included in your commercial auto insurance policy.
Do You Need a Calgary Commercial Auto Insurance Policy?
While it can be confusing as to whether or not you need commercial auto insurance if you use your vehicle for both commercial and personal reasons, what's important to know is that as soon as you use your car for business reasons and get in an accident, you may not be covered—depending on your insurance company. That's why it's essential to check with a trusted Krywolt Insurance broker to see if you need commercial auto insurance.
Does Commercial Auto Insurance Cover Theft of Personal Items?
No, commercial auto insurance does not cover theft of personal items or business items inside a vehicle. Only items permanently attached to the vehicle and used in the operation of the vehicle only will be covered by the auto insurance policy. Items such as tools and attached equipment such as cranes or hydraulic lifts must be added to a separate commercial property policy in order to be covered. Personal items should be added to a personal insurance policy, such as home or tenants insurance.
