University of Maryland Extension

Commercial auto insurance

Nicole Cook, B.S., J.D., LL.M., Environmental and Agricultural, Faculty Legal Specialist, Agriculture Law Education Initiative (ALEI), University of Maryland Eastern Shore

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Typically, auto policies for businesses (“Business Auto Policies” or “BAPs”) include both liability and casualty protection for a company’s use of cars, trucks, vans and other vehicles in the course of carrying out its business. This may include vehicles owned or leased by the farm, hired by the farm, or employee-owned vehicles used for the farm’s business purposes. All automobile coverage is typically specifically excluded from all other general liability policies, so you will have to buy a separate policy to insure any vehicles that are used in your farm business.

Liability protection

This coverage helps pay for legal defense costs and/or another person’s medical expenses or repair bills if one of your covered vehicles is involved in a car accident. Your personal auto policy will not cover the regular use of your personal car for business purposes. Just like your personal auto liability insurance, however, if you use vehicles to run your farm business, the cost of paying premiums for insurance protection in the event of an accident is miniscule compared to the potential costs of being sued or paying for damages. In addition, just like our personal vehicles, if you have business vehicles on public roads, especially if the business holds the title to the vehicle, in most states they will have to have at least a minimum of liability insurance to be on the road legally.

BAPs can be purchased from many insurance companies. Contact an insurance agent for information.

Casualty protection

Covers damage to your vehicles due to things like hail, vandalism, theft, or someone else causing an accident. For businesses, this coverage can help pay for repairs if your vehicle is damaged, and it can cover the cost of renting a vehicle to continue business operations while your vehicle is being repaired or you purchase a new one.

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