Vehicle ownership is not simply limited to a person. Businesses use different vehicles every day. Some businesses own the vehicles they use. Others let employees use their own vehicles, while still more hire or rent vehicles.
The catch here is that standard auto insurance usually doesn't cover vehicles used for business. Therefore, if you use a car regularly for business, you likely need commercial auto insurance. However, business auto insurance policies often vary. The type of vehicle you drive, and how you use it will likely impact the type of coverage you need.
Who Needs Commercial Auto Insurance?
Commercial auto insurance can benefit almost any type of industry. There is no limit to what jobs might require a car, after all. However, there's a relatively simple answer for which drivers need this coverage. If a driver is going to use their vehicle primarily for business, then a commercial policy might benefit them and their business.
Consider some of the industries that use vehicles heavily:
- Realtors travel to visit properties. At times, they take passengers in their vehicles.
- Traveling sales representatives may have clients scattered around a certain region.
- Contractors often haul work equipment and other materials to and from work sites.
- Ride-share drivers carry passengers for a fee every day.
- Delivery drivers might transport food or other goods between businesses and customers.
- Self-employed individuals might work from home. But, they'll often use their vehicles to travel to meetings or other business engagements.
These are just a few of the parties that can enjoy the benefits of commercial auto insurance. More specific commercial policies can apply to commercial truckers, ambulance drivers, package delivery services and other transportation-related jobs.
Getting Coverage for Your Commercial Vehicles
Think about your business driving risks carefully. Ask yourself how you use your vehicle. If you use your personal car to run company errands, then you might not need commercial auto insurance. However, if you drive a company-owned vehicle to perform home health visits, your driving habits directly relate to business operations. In this case, commercial auto insurance can benefit you and your business.
Commercial auto insurance usually functions similarly to standard car insurance coverage. However, its structure accounts for the fact that drivers use vehicles for business purposes. It can better address a company's responsibility following a damaging incident.
Many of the coverage elements of commercial auto insurance will mimic standard policies:
- Collision coverage can help a company cover repairs or replacement of a vehicle it owns following a wreck.
- Comprehensive protection can help repair or replace vehicles following non-accident damages. Situations that might cause damage include fire, theft, vandalism, weather and other threats.
- Liability insurance can protect drivers and companies that are deemed to be at-fault for damage or injuries caused in an accident. For example, your company driver might cause a wreck that breaks another driver's leg. Your business might have to pay for that person's car repairs and medical bills. Commercial auto liability insurance can help cover these costs.
- Medical payments coverage can pay for treatment of injuries that company drivers and passengers sustain in a wreck.
- Uninsured/Underinsured coverage can help the business afford its own damage costs in the event another at-fault driver doesn't have the coverage to compensate the business.
You might also be able to add other forms of coverage to better protect your business and drivers. For example, rental car reimbursement might help your business afford the cost or renting a vehicle while yours is in the shop for repairs.
Insuring Different Commercial Vehicles
If you use a vehicle for business, it necessarily doesn't mean the company owns the vehicle. Some drivers might use their own cars for business purposes. Regardless of who owns the vehicle, businesses might assume a degree of responsibility for accidents that happen during business-related driving. However, how businesses should insure each vehicle will likely vary:
- Vehicles owned and titled by the company should have full, comprehensive insurance. Even if employees use company-owned vehicles for personal purposes, their personal auto insurance policies usually won't cover them.
- If your employees use their own vehicles on behalf of the business, you might need a non-owned auto liability endorsement to your commercial policy. This can help the business protect its own liabilities for the person operating on their behalf. It can usually provide extra coverage beyond the limits of the driver's personal auto insurance. Still, employees driving their own cars should also make sure they carry high liability limits on their own policies as well.
- Self-employed individuals' need for commercial auto insurance will likely vary based on the work they do. For example, someone who transports goods or services, or carries clients, will likely need this coverage.
If you will use company-owned or personal vehicles for business purposes, talk to Auto Insurance Discounters. We can help you decide if commercial auto insurance is right for you.
Regardless of your industry, you might be able to benefit from this coverage. Get in touch with us today to learn more.