Do I Need Commercial Auto Insurance?

If you use a vehicle for work purposes, a personal car insurance policy may not be enough. Commercial vehicle insurance is a common type of business policy that covers vehicles used for business. Commercial insurance does not cover personal vehicles that are used for business purposes, unless it is the primary use of the vehicle. It is important to consider a variety of factors when determining if you need commercial auto insurance.

What Is Commercial Auto Insurance?

As a business owner, you need certain insurance policies to maintain your livelihood. While you probably have a business owner’s policy (BOP) in place, this type of insurance does not provide coverage for vehicles. Therefore, a separate policy is required.

Factors To Consider When Finding Insurance Coverage

Commercial auto insurance protects the vehicles that your company leases or owns, as well as the passengers inside the vehicle at the time of the accident. Commercial auto insurance offers both liability and property protection components. If you are involved in a vehicle accident in which you were at fault, the liability component would cover any bodily injury or damages to someone’s person, vehicle, and property.

Does Your Business Need Commercial Auto Coverage?

Do I need commercial auto insurance? This is a common question asked by many businesses that use one or more vehicles for business purposes. Whether or not you need commercial auto insurance will depend on what you are using the vehicle for and where you travel to while performing business activities.

For example, if you use a vehicle to commute to the restaurant you work at, you only need personal auto insurance. The same applies if you use your vehicle to purchase doughnuts for your co-workers in the morning. However, if you transport people as an Uber driver, deliver pizzas to paying customers or regularly drive long distances to meet with work clients, you may benefit from a commercial auto policy.

What Type of Vehicles Does Your Business Use?

When considering whether or not your business needs commercial auto insurance, consider what type of vehicles you use. Larger commercial vehicles, such as food trucks, box trucks, work vans, and service utility trucks, typically require a commercial auto insurance policy. You will also need to acquire coverage for any employees that operate these vehicles, as well as for any costly equipment inside.

In some cases, regular cars, trucks, and vans may also require commercial auto insurance. If you have a regular automobile that you use primarily for business purposes, you will likely need a commercial auto insurance policy to ensure that you are sufficiently covered in the event of a car accident.

How Are Your Work Vehicles Being Used?

How you use your vehicles for business will make an impact on whether you need commercial auto insurance and how much insurance you will need. As a general rule of thumb, you should have a commercial auto policy if you transport people or goods in your vehicle for a fee or if you conduct a service using your vehicle. You should also have commercial auto insurance if you require higher liability limits due to the risky nature of your work, if you move a large weight of equipment or tools, if you tow a trailer or if your employees operate your vehicle.

How Much Insurance Does Your Business Need?

Most personal auto policies do not offer an adequate amount of liability for businesses. The average maximum limit on most personal auto insurance policies is $500,000. However, commercial auto insurance companies offer considerably larger liability limits. With a commercial auto policy, you can purchase a policy with a liability limit as high as $1,000,000. It is important to remember that it takes just one major accident involving bodily injury or property damage to result in a costly claim against your business. You can reduce your personal risks and gain peace of mind with a commercial auto policy.

Does Your Business Require Specialized Coverage?

Depending on the type of business you operate and the level of risk your drivers’ face, you may want to consider whether or not you need specialized coverage. Many commercial auto policies are available with special coverage options for businesses that face unique circumstances. This typically includes coverage for physical damage to hired or borrowed vehicles. For example, if you rent or borrow a vehicle and it becomes damaged during business activities, this specialized insurance would cover the damages. Special coverage is also available for lease or loan gaps that can occur if a vehicle that you have leased is totaled and you are still making payments on the car.

Speak To The Insurance Agents At JMG

Interested in learning more about commercial auto insurance or want to acquire a policy for your business? Reach out to the experienced insurance agents at John M. Glover Insurance Agency.