Commercial auto insurance Alberta

All about commercial vehicle insurance

When you hear the word commercial, you probably think of big corporations. But commercial auto insurance isn’t just for large companies. It’s also essential for small business owners, independent contractors, or anyone using their personal car for work. Since each of these situations uses a vehicle for business purposes, they all need a commercial auto policy.

Commercial vehicle insurance covers not just the vehicles but also the liabilities from accidents or incidents during business activities, meaning it’s essential for any vehicle used by a company, big or small. Beyond covering vehicle damage and liabilities, commercial auto insurance can also include coverage for fire, theft, vandalism, natural disasters, and even your trailers and attached equipment.

If you’re looking for a commercial auto insurance policy in Alberta, our insurance experts at BrokerLink can help. Our insurance brokers in Alberta will help you find the most suitable coverage and policy features for your business needs.

What does commercial auto insurance cover in Alberta?

Like personal car insurance, all commercial auto insurance policies must follow the car insurance laws set by the Alberta government. In Alberta, a commercial vehicle insurance policy must include accident benefits, direct compensation-property damage (DCPD), and at least $200,000 in liability insurance. However, it’s often recommended to have at least $2,000,000 in liability insurance to ensure your business is well protected. Let’s explore these types of coverages further:

Third-party liability coverage

Third-party liability coverage is essential and mandatory if one of your employees causes an accident that injures someone or damages their property. This coverage means your insurance will pay for the other person’s medical expenses, vehicle repairs, and any legal expenses up to the limit set in your policy.

Direct compensation-property damage (DCPD) coverage

Next, business auto insurance includes mandatory DCPD coverage, which makes it easier to handle claims for vehicle damage after an accident where you’re not entirely at fault. This coverage allows you to claim compensation directly from your own insurance rather than from the other party’s insurer.

If the other party is completely at fault, DCPD coverage takes care of the whole damage claim. If fault is shared, it covers the damage corresponding to the portion that isn’t your fault. This system speeds up the process, ensuring you get compensated for damages to your commercial vehicle as required by Alberta’s DCPD rules.

Accident benefits coverage

Finally, mandatory accident benefits coverage provides support and financial protection for your business and employees if there’s an accident. It covers medical payments and rehabilitation and replaces income for those injured in an accident, no matter who was at fault. This helps those affected get necessary medical care and financial support, aiding their recovery and helping them return to work smoothly.

Optional commercial auto insurance coverage in Alberta

Besides liability, DCPD, and accident benefits, businesses should also consider extra coverage for vehicle modifications and commercial trailers. Additionally, businesses can choose optional extras and endorsements to further protect their vehicles, like comprehensive, collision, or accident forgiveness coverage. Let’s discuss these different types of optional commercial insurance coverage in more detail:

Collision coverage

Collision coverage kicks in when your business vehicle hits another vehicle or object. It pays for repairing or replacing your vehicles, helps financially during tough times, and allows a quick return to normal operations.

Comprehensive coverage

Comprehensive coverage protects your business vehicles from damages or losses not caused by collisions, such as vandalism, fire, theft, floods, hail, hitting animals, or falling objects. It helps cover repair or replacement costs, keeping your business running smoothly.

Commercial non-owned auto coverage

Sometimes, business owners have their employees use their own vehicles for work. If this is a policy you have, you may need commercial non-owned auto coverage. It provides insurance if your employee has an accident while using their own car or another type of vehicle for work purposes.

Hired commercial auto insurance

Don’t own your business vehicle? It sounds like you need hired commercial auto insurance. This optional coverage can be added to your standard commercial vehicle policy for vehicles you rent, lease, or hire for your business, such as cars, pickups, vans, SUVs, and trailers. For instance, say you’re an Amazon driver, and you need to rent a truck to deliver packages; this insurance would cover you for any accidents or damage that happens while using the rented truck for work.

Commercial trailer coverage

Commercial trailer coverage looks after commercial use trailers used in your business by covering physical damage and liability. You can also include trailers you don’t own in your policy for extra liability protection. This coverage helps protect trailers from accidents, theft, vandalism, and other issues, ensuring your business runs smoothly. If your trailers get damaged, the insurance helps cover repair costs and related expenses.

Modifications and attached equipment coverage

This coverage protects any modifications or additional equipment, like winches, fuel tanks, or toolboxes, that you’ve added to your commercial vehicles for business needs. It covers these enhancements against damage or loss. If there’s an accident, theft, or other incident covered by your policy, your insurance will pay for fixing or replacing these added parts.

Accident forgiveness coverage

Accident forgiveness coverage gives businesses peace of mind in the event of an at-fault accident. Including this in your commercial car insurance prevents certain at-fault accidents from raising your insurance premiums, helping maintain a clean driving record. This is especially useful for businesses that rely heavily on their vehicles, as it minimizes worries about how an at-fault accident could affect their insurance costs.

Uninsured motorist coverage

While mandatory in some provinces, uninsured motorist coverage is optional in Alberta. This coverage protects you if an accident is caused by another driver who doesn’t have enough insurance. It covers financial losses due to injuries to your employees or damage to your vehicles caused by an uninsured or underinsured driver. It also covers your business in hit-and-run incidents where the other vehicle involved cannot be identified.

Does my business need commercial auto insurance?

Yes, if you use a vehicle for business purposes—even your own personal vehicle. Personal car insurance doesn’t cover accidents or damage received during business use of your vehicle. Plus, car insurance is mandatory in Alberta, and you could face serious fines for driving without insurance.

Any Alberta business that uses vehicles for work tasks beyond just commuting must have commercial auto insurance. No matter the size or type of business, if you use vehicles for transportation, deliveries, or providing services, you need this insurance. It protects your vehicles and helps prevent financial losses from accidents or other incidents involving your vehicles.

Here are some examples of Alberta businesses that should have a commercial auto insurance policy:

• Delivery companies rely on their vehicles to deliver goods to customers.
• Construction companies that use trucks and other vehicles to carry heavy equipment and materials to job sites.
• Businesses that transport goods, freight, or passengers, such as trucking companies, logistics firms, and passenger transportation services.
• Landscaping businesses that use trucks or trailers to transport tools, machinery, and materials to various locations.
• Food truck businesses need to protect their mobile food trucks and kitchen equipment and cover liability risks while on the move.
• Contractors who use their vehicles to travel between project sites, carry tools, and deliver services.
• Medical or healthcare service providers, such as home healthcare providers or medical transport services.
• Retail businesses that use vehicles for deliveries or transport for business purposes.
• Cleaning companies that travel to clients’ locations and carry cleaning equipment.

Do I need commercial auto or commercial fleet insurance?

It depends on how many commercial vehicles you own. Commercial vehicle insurance generally covers individual vehicles used for business activities. It most often protects a single vehicle, like a company car, delivery van, or truck, but can be used for up to four vehicles.

On the other hand, commercial fleet insurance is a policy designed to cover a group of business vehicles, generally five or more. It insures your multiple vehicles under one plan, making it convenient and cost-effective for businesses with a fleet of cars, trucks, vans, or other vehicles. This insurance has its own set of requirements and is meant for businesses that depend on five or more vehicles for daily operations, such as delivery services, transport companies, construction businesses, and other sectors that use multiple vehicles.

To learn more about how you can protect your commercial vehicle fleet, contact BrokerLink today.

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How much does commercial auto insurance cost?

Now that you know what a commercial auto insurance policy can and may cover, let’s talk about how much one costs in Alberta. The truth is that the average monthly rates in Alberta for commercial auto insurance vary. Each premium is influenced by several factors that insurance companies review to determine your price. Here are some of the key factors they consider:

The type of industry you’re in

The type of business and industry significantly influence the cost of insurance premiums. Industries like delivery services or construction typically have higher risks of accidents, theft, or damages, which can lead to higher premiums.

How many vehicles the business has

How many vehicles you need to insure also impacts the cost. Generally, insuring more vehicles results in higher premiums. However, if you own five or more vehicles, you can apply for fleet insurance, which puts all of your vehicles under one policy, helping you save money on insurance.

The type of vehicles owned

Additionally, the make, model, value, and even the condition of the vehicles used for business can affect insurance rates. More expensive or higher-risk vehicles usually have higher premiums.

How the vehicles are being used

How the vehicles are used is key to determining their risk level. Commercial vehicles used for long-haul trips or heavy-duty tasks are seen as higher risk compared to those used for local deliveries. The main purpose of the vehicles—whether for transporting goods, providing services, or carrying passengers—affects the insurance cost.

Your business's annual mileage

The yearly mileage of each vehicle is also important, as vehicles that travel more are at greater risk of accidents due to heavy traffic or travelling during rush hours, which could lead to higher premiums.

Your and your employees’ driving records

Insurance companies look at the driving history of drivers; those with no accidents or traffic violations are seen as lower risk, which can lead to lower insurance costs. However, if you or your employees have accidents and traffic violations on your driving records, it could lead to higher costs. This can also be determined by the amount of driving experience your drivers have, a driver with less experience may be more expensive to insure due to higher risk of accidents.

The size and location of your business

The size and revenue of the business can influence the cost of insurance; larger businesses typically face higher premiums due to more exposure to risks. The location of the business and where the vehicles are mainly used also impact rates, as areas with more traffic or higher accident rates usually have higher insurance costs.

Your insurance claims history

The business’s insurance history is also important. A pattern of frequent claims suggests you’re at a higher risk for filing more claims, which can increase insurance costs. To avoid raising your rates, it’s best to deal with minor claims yourself when you can.

Your coverage limits, types, and deductibles

Businesses can also affect their insurance rates by choosing their coverage limits and deductibles wisely. Higher coverage limits might increase premiums but offer more protection if a claim occurs. Choosing a higher deductible can lower your premiums, but it means you’ll have to pay more out of pocket in the event of an insurance claim.

If you have any implemented safety measures

Finally, adding safety measures can reduce insurance costs. Businesses that provide driver training, install anti-theft devices, or use telematics to track driving and vehicle performance might get discounts or lower premiums because these actions reduce accident and loss risks.

How can I save money on my commercial auto policy premiums in Alberta?

If you’re in search of ways to save money on your commercial auto insurance in Alberta, you’ve come to the right place. At BrokerLink, we’re ready to help you find a policy that fits your budget. We understand that having business insurance is already expensive, so we work hard to get you discounts, ensuring you get the best commercial car insurance policy at the most affordable price.

Plus, our insurance advisors are experts in the field and are eager to share their top tips with you. Here are BrokerLink’s best strategies for finding affordable commercial auto insurance in Alberta:

Bundle your insurance policies

Our first tip for saving on insurance is to bundle your commercial auto insurance policy with other business insurance policies, such as property, general liability, or business owner’s insurance. Insurance companies often give discounts when you have multiple policies with them, which can lead to big savings.

Increase your deductible

Another tip is how it’s also important to think about your deductible amount. Choosing a higher deductible can reduce your premium, but make sure you can afford to pay more upfront if you need to make a claim.

Switch to fleet insurance

If your business uses several vehicles, switching to fleet insurance can be a cost-effective option. Fleet insurance covers multiple vehicles under one policy, which makes managing them simpler and might also lower your premiums with a discount for insuring multiple vehicles. This method simplifies the insurance process, makes it easier to keep track of and renew insurance for all your vehicles, and is financially beneficial for businesses with five or more vehicles.

Promote safe driving practices

Another tip is encouraging safe driving among your employees. Urge your drivers to follow traffic rules, avoid abrupt stops, and maintain appropriate speeds to maintain clean driving records. Many insurance companies offer programs that monitor driving behaviours through telematics, giving safe drivers discounts on their premiums.

Install winter tires on your company vehicles

Also, fitting your business vehicles with winter tires during cold months is a wise decision. Winter tires enhance traction in snow and ice, making accidents less likely. Insurers often offer discounts on premiums for using winter tires, recognizing this safety measure.

Consider using an electric or hybrid vehicle

Choosing eco-friendly vehicles like hybrids or electric vehicles (EVs) for your commercial fleet can lead to lower insurance premiums. These vehicles usually have advanced safety features that reduce accident risks and are cheaper to insure. Additionally, some provinces provide incentives for businesses that use eco-friendly vehicles, which can further reduce insurance costs.

Implement risk management practices

Another great tip is to show your insurance provider that your business is serious about reducing risks by setting up a comprehensive risk management program. This could include regular vehicle maintenance, driver training, and safety protocols. Demonstrating your commitment to safety can help you get insurance discounts and better premium rates.

Work with an insurance broker

Our final tip is to work with a licensed insurance broker. An experienced broker can be very helpful in understanding the complex world of insurance, finding the best coverage from top insurance providers, and getting competitive commercial insurance quotes for you to pick from. Teaming up with a reliable broker can lead to significant cost savings and ensure your business is well-protected on the road!

Why work with a BrokerLink broker

Since 1991, the BrokerLink team has been dedicated to finding insurance policies that meet the needs and budgets of our customers. We are experts in all things insurance and can ensure you receive the most competitive rate on your policy.

We’re in your community

Getting involved in the community is a big part of who we are. We live and work in your community. We love meeting our neighbours!

Get your free commercial auto insurance quote from BrokerLink today

At BrokerLink, we’re here to help you with any insurance needs you may have. Whether it’s insuring your home, car, business, recreational items, travel plans, or pets, let us help you find the best coverage possible.

You can reach us by phone, email, or in person at any one of our locations throughout Alberta. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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FAQs for commercial auto insurance Alberta

What constitutes commercial use of a vehicle?

Using a vehicle for any business-related activities, such as deliveries, transporting goods, or driving between work sites, counts as commercial use.

How much is commercial insurance in Alberta?

The cost varies widely depending on factors like vehicle type, usage, and business size. It’s best to get a quote tailored to your specific needs.

What is the best commercial vehicle insurance in Alberta?

The best commercial vehicle insurance in Alberta depends on your specific business needs, including the type of vehicles you use and the level of coverage you require. It's important to compare quotes and services from different insurers and consider working with an insurance broker who can help you find a policy that matches your needs and budget.

How much liability insurance do I need in Alberta?

You need at least $200,000 in third-party liability coverage, but it’s recommended that you have at least $2 million for adequate protection.

How much business insurance do I need for my commercial vehicle?

The amount of insurance needed depends on your vehicle’s use, value, and the risks associated with your specific business activities. It’s wise to consult with an insurance broker to determine the right coverage level.

How can I lower my Alberta insurance premium for my company vehicle?

To lower your insurance premiums for a company vehicle in Alberta, consider increasing your deductible, bundling insurance policies, ensuring all drivers have clean driving records, and installing safety features in your vehicles. You might also look into discounts for things like low annual mileage or using eco-friendly vehicles.

If you have any questions, contact one of our local branches.