As a business owner, you probably find your career stressful but rewarding. With the many responsibilities you have to be successful in a competitive marketplace, you have a lot of pressure to make the best decisions for your company. One of these choices involves insuring against perceived risks that could jeopardize your venture’s financial health and reputation.
Commercial insurance is a must if you currently rely on a personal vehicle or company car to conduct business. You may be thinking, “But I hardly travel for work. Won’t my regular coverage handle an accident?” Probably not.
If you aren’t sure whether you should buy a commercial auto policy or not, this article will prove invaluable in understanding why it’s so important to your risk mitigation efforts.
What is Commercial Auto Insurance?
A commercial auto policy provides a wide range of protections for vehicles, drivers, passengers, and goods transported in your company car or truck. The primary difference between it and your personal policy is it has higher coverage limits since accidents involving company vehicles typically incur more damage claims and lawsuit risks.
For example, you are a florist and send your driver out on deliveries. At some point on his route, he makes an illegal u-turn that results in your company van getting t-boned by an oncoming car with the right of way. These policies step in to handle the financial fallout from these incidents so your bottom line doesn’t have to, saving your company thousands in dollars in damage claims and legal fees.
What If I Use My Company Vehicle for Personal Use?
Regardless if you’re traveling for business or going home for the night, your commercial policy will protect you if an accident occurs. This protection isn’t reciprocated with personal coverage, however. So, if you work from home and drive to the bank to deposit client payments, you’re technically on company time and need commercial coverage to protect your activities.
If you are still unsure if a commercial-grade auto policy is necessary, just think about how you’ll use the car. If your day-to-day use involves company activities, get a commercial policy. When in doubt, speak with a knowledgeable insurance agent about your situation to get the best recommendation for protection.
Am I Legally Required to Carry Commercial Auto Insurance?
Believe it or not, most states require business owners to have car insurance that meets the state’s minimum coverage limits. It’s your responsibility to ensure you’re properly insured for business or personal vehicle use. While it may be tempting to buy the minimum required coverage to be street legal, you aren’t adequately protected if using a private car for business and under a personal policy.
Common activities that would indicate you need a commercial auto policy include:
- You use your car mostly for work
- You or your team deliver goods (Uber Eats, newspapers, etc.)
- Moving or transporting tools and equipment
- Running a ride-hail service
- Transporting supplies needed for your business
- Jobs involving construction
- Catering
- Employees use your fleet to deliver goods
- You’re running a tow truck business
- The vehicle is either rented, leased, or owned by your company
Essentially, if your vehicle is used for more than simply commuting to work, you probably need a commercial auto insurance company.
Situations Covered by a Commercial Vehicle Insurance Policy
There are many accident situations where a comprehensive insurance policy can step in and protect your business against liability claims. Below are just some of the many collision scenarios where commercial coverage could benefit your business greatly:
- Bodily Injury – If you or an employee are in a car accident, this portion of your policy pays for third-party injury claims against you.
- Property Damage – Much like the name suggests, if your vehicle causes damage to another person’s property (car, fence, landscaping, etc.), this is covered up to the policy limits.
- Personal Injury – If you or an employee sustain injuries in an accident, this policy coverage pays for the related costs of medical care and lost wages.
- Non-Owner Auto Coverage – If you rent a car to conduct your business and cause an accident, this type of commercial coverage can cover that vehicle even though your business doesn’t own it.
- Collision Coverage – Just like the name suggests, this benefit handles the collision accident cost regardless of fault.
- Comprehensive Coverage – Another important part of your insurance policy that pays for damage to your car caused by something other than a vehicle (fallen tree, hail, etc.).
- Uninsured/Underinsured Motorist Policy – This commercial auto insurance covers damages from an accident where an uninsured/underinsured driver is at fault.
Need to Get a Commercial Auto Insurance Quote?
As you can see, commercial auto insurance costs include significant protection against motor vehicle accident situations that could potentially devastate your business. Therefore, a policy is a key to your risk mitigation strategy, which can give you peace of mind knowing you’ll never have to risk your company’s financial well-being to cover the cost of a claim.
If you haven’t already purchased commercial auto coverage because you aren’t sure your business requires it, speak with a knowledgeable insurance agent about your situation. They have extensive experience insuring countless industries and will likely be able to help you determine the best policy for your needs.
