Commercial auto insurance policies exist to protect business owners and their vehicles from damages incurred during work-related use. If you own your own business but aren’t sure whether you need to obtain a commercial policy for a vehicle that you use during the course of the business day, you’re not alone. Read on to learn how to tell when it’s time to upgrade from a personal to a commercial auto policy and why it’s so important to do so.
What Does a Commercial Policy Cover?
Commercial policies aren’t much different than personal auto insurance policies. Good plans include coverage of the following:
Liability: This is an important one, because drivers tend to see business owners as deep-pocketed. You don’t want to be the subject of a lawsuit or left holding the bag for thousands of dollars in crash-related bills.
Uninsured Motorist: The same logic applies for uninsured motorist coverage. You don’t want to be blindsided, literally, by a ruinously expensive accident that threatens your business’s financial stability.
Comprehensive Coverage: Unless you have a shiny new luxury car in your garage, you probably hold your work vehicle in higher regard than your personal automobile. It’s your breadwinner, after all, and you should take care of it with a comprehensive policy that includes collision coverage.
When Do You Need Commercial Insurance?
There are a few telltale signs that your vehicle requires a commercial auto insurance policy:
Registration: If you’ve registered the vehicle in your business’s name, you can’t pretend that it’s not being used for business purposes. Likewise if it’s registered in your name but rarely leaves the work site.
Drivers: If you clock the majority of your “business” vehicle’s miles on household errands or family outings unrelated to your business, you probably don’t need commercial auto insurance. Conversely, a personal policy won’t cut it if your vehicle is driven primarily by one or more of your employees during the workday. You’ll want to take out a commercial policy that insures individual employee drivers to cover yourself fully.
Non-Owned Coverage: If you need to obtain supplementary “non-owned” coverage insurance for drivers who don’t own your vehicle, you’ll want to take out a commercial policy to avoid legal complications and confusion.
Defining Business Use
Like many small business owners, you may be unsure if your activities constitute “business use.” After all, you may not need or be able to pay for separate business and personal vehicles. Use the following list as a starting point to determine whether your business activities are suitably “businesslike” in the eyes of major insurance companies.
-Towing or carrying hazardous materials or heavy-duty equipment.
-For-hiring towing and hauling services.
-Retail and commercial delivery, including newspapers, sensitive documents, flowers and bulk food shipments.
-Taxi and livery services.
If you know you need a commercial auto insurance policy but have been avoiding taking one out due to pricing concerns, don’t delay any longer. While commercial auto insurance usually costs a bit more than a personal policy, it confers peace of mind and will pay for itself in the event of a claim. Ask your insurance company about commercial insurance today and give your business the protection it deserves.
Donna Summers is a guest writer for www.businesscarinsurance.co.uk where you can look into insurance and commercial and business car coverage.