Why Your Toronto Business Needs Commercial Auto Insurance

Why Your Toronto Business Needs Commercial Auto Insurance

May 9, 2024 / 5 mins read

Do you use your car to drive to job sites, for business appointments, or to pick up or deliver goods or people for your Toronto small business? If you use your vehicle for business purposes, you need commercial auto coverage.

Commercial auto coverage helps protect your Toronto business from liability and protects its assets if you are in an accident. Having a commercial car insurance policy is an essential part of running your Toronto small business.

Is your small business in Toronto’s downtown area or does it serve clients in one of Toronto’s many neighbourhoods?

Is your business located in Scarborough, Etobicoke, North York, York, East York, or are you in Mississauga, Bolton, Caledon, Hamilton, Markham, Vaughan, Newmarket, Aurora, Orangeville, Richmond Hill, or Milton?

Wherever your small business is located in Toronto, Greater Toronto Area (GTA) or anywhere in Ontario, your Western Financial Group business insurance expert will give you top-notch commercial insurance advice and help you find ways to save on insurance.

What is commercial auto insurance?

Commercial auto insurance provides protection for vehicles that your Toronto business owns and uses, such as cars, trucks, vans, and trailers.

Your personal car insurance typically does not cover vehicles used for work purposes and doesn’t have enough protection for work purposes.

If your Toronto business has 5 or more vehicles, you’ll need fleet insurance. Fleet insurance is typically cheaper than having individual policies on each of your company’s vehicles.

How much does commercial auto insurance cost?

There isn’t a one-size-fits-all price for a commercial car insurance policy for Toronto small businesses.

These factors are taken into consideration:

  • Your type of business
  • Your driving record
  • Years of experience
  • Type of vehicle
  • Age and gender
  • Your location
  • Where the vehicle is parked
  • Anti-theft devices
  • How many kilometres driven annually
  • Any past claims

Why do you need commercial auto insurance?

Toronto small business owners need to protect themselves from third-party liability injury, death, and property damage that could happen as a result of an accident when using a vehicle for business purposes.

Who needs commercial vehicle insurance?

  • Retailers/wholesalers
  • Construction
  • Professional services
  • Manufacturing
  • Personal healthcare providers

What does commercial auto insurance cover?

A standard commercial auto policy includes:

Third-party liability: It is mandatory in Ontario/Canada and it provides protection if you’re at fault in an accident for injuring or killing someone or damaging their property.

As a Toronto business owner, you are legally required to carry a minimum of $200,000 in third-party liability coverage, but it’s recommended you increase the coverage limit to at least $1 million if not more to protect your business.

Accident benefits: This kind of coverage includes payment for your medical bills and rehabilitation no matter who is at fault for the accident. The law requires you to carry a minimum of $200,000 in accident benefits coverage, but you can increase it to ensure your Toronto business is adequately protected.

Direct compensation-property damage (DCPD): As of January 1, 2024, Ontario car insurance customers can choose whether to opt out of DCPD coverage at any time.

DCPD covers your vehicle, its attached contents (such a backup camera or a dashboard entertainment system), and the loss of use of your vehicle if you are partially at fault or not-at-fault for an accident. DCPD means you deal with your insurer directly instead of suing the other driver for damages.

Here are optional coverages you can add to a standard commercial auto insurance policy:

Collision coverage:

Collision coverage pays to repair or replace another driver’s car due to a collision that you were responsible for causing.

If you don’t have collision coverage in your commercial auto policy, you will be responsible for paying to repair damages to your vehicle resulting from a collision.

Comprehensive coverage:

It covers damage to your car from severe weather such as hail or due to vandalism or theft. Comprehensive coverage also helps cover the cost to replace your business car if it’s stolen.

All perils coverage:

All perils coverage combines collision and comprehensive coverages. It also covers you for damages if an employee or member of your household steals your business’s vehicle.

Specified perils coverage: It protects your commercial vehicle from the perils specifically named in your policy, such as theft or weather-related damage.

Here are 3 ways that commercial car insurance can protect your Toronto business:

  1. You get into an accident on the way to pick up goods for your business and a passenger in the other vehicle is injured and has decided to sue you. Your third-party liability coverage can help pay for court costs, settlements, or expenses if you were at fault for the accident.
  2. Your van for your Toronto business is vandalized with spray paint. Your comprehensive coverage can help restore your van.
  3. Hail damages your business car. Comprehensive coverage can help repair your vehicle.

Here’s an insurance checklist for Toronto small businesses:

  • Do you have the best Toronto business insurance rate that suits your work?
  • Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for you?
  • Are you or your employees using personal vehicles for work?

What do I do if there’s a claim against my Toronto business?

  • Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
  • Know your policy so that when you contact your broker you are familiar with what will be covered or not.
  • Document the damage. Take photos right away and write down what happened.
  • Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
  • Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
  • Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Western Financial Group has licensed BUSINESS INSURANCE EXPERTS to get you the right commercial auto insurance at the right value for your Toronto business. Our experts are available now to help you navigate the business insurance journey.

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