Do You Need Commercial Auto Insurance Coverage as a Small Business?
By: Mary Thompson, Capstone Brokerage President, August 2014
Sometimes as a business owner it can get confusing as to whether or not you need to have a commercial auto policy in place. Automobile liability insurance, at a minimum, is required by most states whether a vehicle is used by a company or individual. To help determine if your company needs a commercial automobile policy in place it would be helpful to understand the difference in personal and commercial automobile coverage.
Personal auto is designed for the needs of individuals or families. It protects personal assets in the event of an accident and provides money to cover the cost of vehicle repair, medical expenses and any damages that are caused in the event an individual is in an accident. The minimum requirements by most states is that individuals carry automobile liability coverage, which will be used if the driver is found to be at fault.
Commercial coverage is designed for the needs of a business. It protects the business in the event of an accident. Typically there are several drivers listed on any one vehicle, they are all also protected by the commercial policy. Commercial liability protection is usually higher then what is offered on a personal auto policy. It will still cover the cost of vehicle repair, medical expenses and any damages that are caused in the event a listed driver is found to be at fault. Commercial auto insurance policies offer higher liability limits to protect the business. The common limits used are $1,000,000. A commercial policy may also have provisions that cover rented and other non-owned vehicles, including employees’ cars driven for company business.
Determining whether your company needs to have a commercial auto policy in place is easier then you may think. Ownership and use of vehicle determine whether a personal or commercial policy is appropriate. First and foremost is the vehicle used for business purposes? Not just to go to and from works but if the vehicle is used to transport people, deliver packages, or on a construction jobsite, then commercial coverage is more then likely needed.
Other things to consider according the to National Association of Insurance Commissioners,
• Who owns or leases the vehicle – you individually or the business as an entity
• Who drives the vehicle – you or your employees
• How the vehicle is principally used – For company or individual needs
Now Every Individual has Unique Insurance Needs as does every business. Whether a company is purchasing a new vehicle or hiring a sales person, every situation is different. Discuss these matters with a licensed insurance agent who knowledgeable about commercial auto insurance.
Here in Las Vegas with construction starting back up all around it seems that business is starting to rebound from the recession. Many small companies are once again emerging or growing. It is refreshing to see construction vehicles back on our streets and new buildings popping up. With this growth I think it is important for all business to understand the need to protect themselves against all risks, especially automobile coverage.
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