Whether you manage a fleet of delivery drivers or just have a couple company cars, if your business takes you on the road, you need auto insurance to satisfy legal requirements, protect you from liability, and insure you recoup the cost of fixing or replacing damaged vehicles and equipment. While it may be tempting for smaller operations to get by on personal auto policies, this can be a big mistake, as most personal policies carry exclusions for work-related driving that may leave you high and dry in case of an accident. A commercial auto policy will provide you with the coverage you need and be tailored to fit your industry and business structure.
What is commercial auto insurance?
Commercial auto insurance provides many of the same benefits as personal auto insurance, including coverage against,
· Bodily injury liability
· Property damage liability
· Uninsured motorists
· Physical damage
· Personal injury
While this list may look very familiar, commercial auto policies differ significantly from personal auto policies under closer examination in terms of liability limits, coverage, and premiums. How these differences play out in your business will be shaped largely by your industry and the way you use your vehicles. For instance, a busy regional manager who spends much of her day traveling between locations may not need additional coverage on her sedan but may find that her insurer requires a higher premium because she spends so many hours on the road. Meanwhile, a foreman who regularly hauls a utility trailer full of expensive equipment will likely require more coverage to protect the contents of his trailer and might need a higher liability limit due to the weight of his vehicle.
Who needs commercial auto insurance?
Consulting an insurance agent who has an understanding of your business and current policies is the best way to decide whether you need a commercial auto policy, but there are a few basic guidelines:
You should look into a commercial auto policy if,
· Your business owns or leases the vehicles in question,
· You deliver items or transport people for a fee,
· You are insuring a vehicle that is significantly larger or heavier than a standard passenger vehicle,
· Your business was formed as a Limited Liability Company (LLC) or Corporation,
· or, you require higher liability limits than offered through personal auto policies
Fit your policy to your business.
Because commercial needs are so diverse, commercial auto policies are highly customizable and can be tailored to fit the way you and your employees take to the road. Does your business add vehicles to its fleet with some regularity? Your policy can be written to cover any vehicles you purchase during your policy period. Do your employees drive their own vehicles while on the clock? A non-owned vehicle endorsement will give you coverage for accidents that happen while they are on the road (more information on non-owned vehicles below). Do you sometimes rent or hire vehicles? Purchase hired auto coverage to ensure you’re covered for damage done to your rentals. You can also purchase coverage for heavy commercial vehicles like semis and dump trucks or for specialized equipment that will sometimes be driven on roadways, like forklifts or backhoes.
What if my employees drive their own vehicles?
Remember, most personal auto policies carry exclusions for accidents that occur while the driver is on the clock—whether or not the driver owns the vehicle in question. If your employees drive their own vehicles for work but haven’t notified their carriers and made the necessary adjustments to their policies, they could wind up having a claim denied if it is discovered that the collision occurred during the course of their duties.
Your employees aren’t the only ones taking a risk though. Because your employees are viewed as representatives of your business while on the clock, you may be held liable for accidents that they are involved in while performing their duties. In this case, a commercial auto policy may still not be necessary, but it would be a good idea to talk to your agent about adding a non-owned vehicle policy to your coverage.
The variety of options offered by commercial auto policies make it possible for business owners to purchase coverage that is a great fit for the way they work, but all these choices can also make for a complicated purchase process. The independent insurance agents at Moreland Insurance would be happy to help you evaluate your needs, research options, and negotiate the purchase of a policy that keeps you, your employees, and your business covered on the roads.