You know that a personal auto insurance policy is a must, but have you considered the importance of commercial auto insurance?
If your employees use a company car for work-related purposes, a business auto policy can help protect your corporation from expensive liabilities.
One common misstep is to believe that your personal policy will provide the extensive coverage you need. Or, you might think that your plan will protect you from personal injury or property damage claims if you’re involved in an accident using a designated work vehicle.
Today, we’re sharing five important reasons why commercial auto insurance is a smart investment. If these apply to you and your business, consider applying today.
1. A Personal Policy Isn’t For Business
A personal auto insurance policy is required by law, and works as its name implies. It’s meant to protect you as an individual driver. It’s not intended to cover your entire business in the event of an accident.
Not sure who your policy covers? Read the declarations page carefully. Here, you’ll find the name of the insured party.
In many cases, coverage also extends to a person’s spouse and/or children. However, it usually doesn’t include your employees or anyone else who clocks in at your workplace. If you allow employees to use your personal vehicle for work purposes, they generally aren’t covered under your personal policy.
Instead, you’ll need a separate commercial auto insurance policy for any vehicle that:
- Your company uses for business purposes
- Has a commercial tag or license plate
- Is registered with the USDOT as a commercial vehicle
One exception? Sole proprietors who only use their vehicle for commuting, or for minimal local travel, might only need a personal auto insurance policy. However, you’ll need to double-check with your agent to ensure that your liability coverage is sufficient to cover the costs of an accident.
2. You Need Liability Coverage
Yes, a collision will impact your vehicle. However, it can also damage other vehicles, as well as nearby property. If you or any of your employees is deemed directly responsible for such damage, it can be a major financial strain to take on the repair expenses yourself.
Even if you aren’t the one at fault, you could find yourself in need of major vehicle repairs. If you have a business auto insurance policy, it can kick in to help you cover those costs. Most plans also include coverage for uninsured and underinsured motorists, so you know you’ll have access to the protection you need.
If injuries or property damaged sustained leads to a lawsuit, a commercial policy can also help you cover some of the costs associated with hiring a legal team to defend your case.
Note that a commercial auto insurance policy is only intended to cover smaller-scale vehicles, including cars, taxis, vans, buses or small trucks. If you own larger, commercial vehicles, such as tow trucks or tractor trailers, you’ll need to purchase a commercial truck insurance policy.
3. It Protects Business Equipment
Your work vehicles aren’t only used to get your employees from Point A to Point B. Many times, they’re also used to transport valuable business tools and equipment, from computers to catering supplies.
If an accident occurred and that property became damaged, could your business comfortably cover the costs required to replace it? While your commercial auto policy might not cover the payment in full, it could get you a lot closer and help you keep your doors open while you recoup.
Without such a policy in place, you might be required to temporarily close while you save enough to replenish your gear. Not only could this deliver a financial blow, but it can also compromise your business reputation.
4. Medical Treatments Are Costly
Depending on the severity of the collision, injuries related to a car accident to reach up to six figures. Understandably, this isn’t a cost that your business would want to shoulder. Such sudden, out-of-pocket expenses could send you reeling, even if you have a robust emergency fund in place.
If an accident results in bodily harm, your commercial policy could help cover some of the costs associated with emergency room visits, inpatient or outpatient care, physical therapy and other treatments. Under most commercial and personal policies, this is known as a Personal Injury Protection (PIP) plan. To date, 13 states require drivers to carry PIP coverage.
In addition to medical expenses, PIP coverage can also help cover the costs of lost wages for the driver, as well as any other injured passengers.
5. Your Lease May Require It
Most of the time, a lessee will require a business to maintain up-to-date commercial auto insurance policies. This also helps to protect their company in the event that one of your employees experiences an accident. It doesn’t matter if all of your employees are great drivers, they know that the unavoidable could happen, and they want to be prepared.
If a collision occurs and damages a leased vehicle, the lessee could be held responsible for covering the costs associated with the accident. With a commercial auto policy, however, they can offset those expenses and preserve their bottom line.
Request a Business Auto Policy Quote Today
Now that we’ve shared five important reasons why you might need a business auto policy, are you ready to explore your options? It can be dizzying to consider the different types of plans out there, so we’ve made it as easy as possible.
Our simple online platform allows you to request a quote with just one click! In addition to commercial auto insurance, we can also help you find personal auto insurance, as well as home and property insurance, renter’s insurance, and more.
Fill out our form today and we’ll help you secure the valuable, customized coverage you need.