Commercial auto insurance is a type of insurance policy designed to provide financial protection to businesses that use vehicles for their operations. This insurance policy covers a range of vehicles, including cars, trucks, vans, and other types of vehicles that are owned or used by a business.

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Here’s how commercial auto insurance works:

1. Purchase the Policy: The business purchases a commercial auto insurance policy from an insurance company that meets their specific needs and requirements.

2. Choose Coverage Options: The policyholder can choose from a range of coverage options, including liability coverage, collision coverage, comprehensive coverage, and uninsured motorist coverage.

3. Pay Premiums: The business pays premiums to the insurance company based on the coverage options selected, the type of vehicle(s), and the level of risk involved.

4. File Claims: If an accident occurs and there is damage to the vehicle or property, or if someone is injured, the policyholder can file a claim with the insurance company.

5. Receive Payment: If the claim is approved, the insurance company will provide financial compensation for the damages or injuries, up to the policy limit.

Commercial auto insurance coverage provides businesses with financial protection against the risks associated with operating vehicles for their operations. This coverage can help businesses avoid significant financial losses that could arise from accidents, theft, or other unforeseen events. It is important to choose a policy that meets the specific needs of the business and regularly review and update coverage to ensure it remains adequate over time.