How Does Uninsured and Underinsured Motorist Coverage Help Protect My Business?

April 13, 2023 by Kemper

Woman takes a picture of a commercial van as it gets towed away

What happens if any of your company’s vehicles are hit by an uninsured or underinsured driver during business operations? Uninsured (UM) and underinsured (UIM) motorist coverage can help protect your business from other drivers who have no insurance, or not enough insurance to cover vehicle damage or bodily injury expenses resulting from the accident they caused. Here’s how UM and UIM coverage can help protect your business. 

What is Uninsured and Underinsured Motorist Coverage?

UM coverage helps protect against damages resulting from an accident caused by drivers who do not have liability insurance coverage, and underinsured motorist coverage helps protect against accidents caused by drivers who do not have sufficient liability coverage to pay for damages they cause. 

Both UM and UIM coverage can help cover vehicle damage and expenses caused by an at-fault driver and related to bodily injury sustained by the driver and their passengers. Without this coverage, if you are hit by an uninsured or underinsured driver you may have to cover all or some of these costs yourself. 

What Are My Options for Coverage?  

Not all states offer all coverages. It is important to note that depending on the state you live in, UM and UIM coverage may be offered together or as separate coverages. The same can be said for bodily injury and property damage protection, meaning that you could have up to four options, which can be purchased separately or combined: 
•    UMBI – Uninsured motorist bodily injury 
•    UMPD – Uninsured motorist property damage 
•    UIMBI – Underinsured motorist bodily injury 
•    UIMPD – Underinsured motorist property damage

Your business commercial vehicle liability coverage may also include UM and UIM coverage, so it is important to review your policy documents to see whether this is included in your plan or not.

Do I Need Uninsured and/or Underinsured Motorist Coverage?  

As of October 2022, UM and/or UIM coverage is required in 18 states and Washington, DC. It is important to check your state’s requirements to ensure you are compliant. An insurance agent can help determine your individual state’s requirements. 

While you might not be required to purchase this coverage, you should understand the protection it can provide to your business. The Insurance Research Institute estimates that nearly 13% of drivers in the United States do not have auto insurance. This figure is over 20% for some states. Furthermore, drivers in many states are not required to carry enough property damage liability insurance to cover major damage to most commercial autos. For example, drivers in California are only required to be insured for $5000 of property damage. If any of your company vehicles are hit by an at-fault uninsured or underinsured driver, you may be responsible for some or all the vehicle damage and bodily injury expenses resulting from the accident. 

Talk With an Expert First

If your business has commercial vehicles, it is worth taking the time to better understand UM and UIM coverage and the protection both can provide. 

Reach out to an agent today to learn more about your UM and UIM coverage options and help determine whether they are a good fit for your business. 



This material is for general informational purposes only. Products, services, and discounts referenced herein are not available in all states or in all underwriting companies. All statements are subject to the terms, exclusions and conditions of the applicable policy. In all instances, current policy contract language prevails. Coverage is subject to individual policyholders meeting our underwriting qualifications and state availability. Other terms, conditions and exclusions may apply.