Any business that owns or operates vehicles, or that allows employees to operate their personal vehicles on the business’s behalf, needs commercial auto insurance. Just like a private driver can be hit hard by the effects of a car accident or similar issue, so too can a business. The business has to be ready to respond in order to address the cost challenges that might arise under such unexpected circumstances.
Just one of the multitude of issues that might arise from a commercial vehicle accident are injuries to the involved drivers — both employee drivers and others involved in the accident. At this time, three types of benefits — medical payments, commercial auto liability and workers compensation insurance — can come to the injured parties’ aid. However, each benefit will apply to unique losses.
Know How Your Commercial Auto Insurance Will Cover Injuries
Commercial auto insurance is a very dynamic policy, and policyholders can add numerous benefits to their plans to make them as specific to their needs as possible. Most plans offer a couple of different benefits that will apply to injuries sustained in accidents:
- Bodily Injury Liability Insurance: In most states, liability insurance is mandatory for all drivers, including commercial vehicle operators. It pays for third-party injuries or property damage when the policyholder is at fault for an accident that leads to injuries. So, if a commercial driver were to hit another vehicle, injuring the driver inside, liability insurance will compensate that injured party. It will not compensate the policyholder.
- Medical Payments Insurance: This coverage extends to the driver of the insured commercial vehicle itself (whether the driver is the vehicle owner or another employee driver). It will help this party cover their medical bills that arise as a result of their accident injuries, alongside any benefits provided by their own health insurance or other benefits. Coverage can also pay for the injuries of any passengers traveling in the vehicle at the time of the accident.
- Personal Injury Protection (PIP): PIP insurance is similar to medical payments coverage, though it is more expansive. Not only will this coverage provide medical benefits, but also it can provide certain income replacement, disability coverage and even a death benefit if the driver is killed.
Separately from commercial auto insurance, injured employee drivers might also qualify for workers’ compensation as a result of injuries sustained in a commercial vehicle accident. Workers’ compensation insurance is designed to provide supplementary income, disability and medical benefits in the event that an employee gets injured on the job.
Most businesses in most industries are required to carry this coverage. Since commercial vehicle operations are considered part of an employee’s working duties, injuries sustained in accidents will often qualify for workers’ compensation. However, if an employee agrees to take workers’ compensation benefits, they often do not qualify for medical payments coverage or PIP benefits.
Understanding Medical Payments Coverage
Commercial auto insurance policyholders can benefit significantly from medical payments coverage or PIP coverage. However, it is subject to conditions. The big-picture ideas that you must keep in mind when wondering whether your plan covers certain injuries are:
- It does not factor in fault. This means you can obtain benefits even if you or your driver caused the accident.
- It covers most of your own medical bills related to the incident. This includes hospital bills and ambulance coverage. If a death occurs, it may help cover funeral costs.
- If an employee driver qualifies for workers’ compensation, then they often cannot file for medical payments or PIP benefits as well. However, if you do not receive workers’ compensation, you can use your medical payments benefits in addition to your regular health insurance when it comes to covering your injury costs.
- Sometimes, medical payments insurance and PIP benefits may be more affordable than a basic health insurance policy. Therefore, if your employees lack health insurance, this policy can be critically valuable to you. It may pay their medical bills in full. However, don't use it as a substitute to strong medical coverage, nonetheless.
- It is important to realize risks are high. Medical losses can be very expensive. This happens even when accidents are seemingly minor. Therefore, added coverage is often necessary in helping businesses manage the overall cost risk of driver and passenger injuries.
- All medical payments and PIP benefits have limits. Most will have limits up to a specific dollar value.
Some businesses may not need medical payments coverage, depending on the nature of their health insurance offerings and their workers’ compensation insurance setup. Still, it is an affordable benefit that can be optimized to any injured party’s advantage in the event that they ever need it.
When getting your medical payments benefits, be sure you know what your current commercial auto policy covers. Discuss losses others had recently. Do you have enough protection? If not, a medical payments policy can be an inexpensive way to protect your company.
Also Read: Cargo Coverage Under Commercial Auto Insurance
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