Does your business need commercial auto insurance? Considering that, according to the CDC, motor vehicle accidents are the leading cause of work-related deaths in the United States, you’d be foolish not to cover yourself against those risks.
However, not all types of businesses will require commercial insurance for vehicle travel, and some self-employed people may not get the coverage they need from their personal auto policy alone. How can you tell whether or not your business needs commercial auto insurance? Here’s what you need to know.
If Your Business Has Branded Vehicles, You Need Commercial Insurance
While this could go without saying, we felt it important to state for the record. If you run a business that has vehicles with obvious branding on the sides, you need to have commercial auto insurance. The most common businesses that have this driveable marketing include:
- Food delivery services
- Moving and delivery companies
- Skilled trades businesses
These branding-covered vehicles place your business front and center and are often only driven for business purposes. Therefore, they will need business auto insurance.
Commercial Auto Insurance for the Self-Employed
When you’re self-employed, the line between what’s covered under your personal auto policy and what requires commercial insurance gets hazy. Since you’re driving yourself everywhere and not all of the driving is on business time or for business purposes, you may not know what coverage you need. If your self-employment is in the gig economy, this line can get even thinner.
So, how can you tell whether you need commercial auto insurance or a personal policy as a self-employed worker? You need to consider:
The Type of Work Your Vehicle Does
Not all business purposes are created equal. Some types of limited business use may in fact be covered under your personal policy.
For example, if your business only involves driving yourself to client homes and offices, your personal auto policy should cover you while you drive. However, even this is a matter of distance. If you regularly log high mileage from traveling between store locations and clients, you’ll want to have a commercial auto insurance policy. (It may even prove cheaper for you!)
On the other hand, if you convey goods, people, or work equipment with you, you need business insurance. Many a small landscaping business owner has tried to get sneaky with their auto insurance provider, arguing their three pick-up trucks with attached trailers that often hold lawn equipment are only for personal use. Don’t be like those people, as they’re committing insurance fraud, can get dropped by their provider, and potentially face legal consequences if they get caught.
And yes, this need for commercial insurance also applies even if you work as a delivery driver for someone else. Your old, trusty pizza delivery mobile is not covered while you’re on the clock. This same principle also applies to services like DoorDash, Bite Squad, Uber, and Lyft. While some of these companies can provide coverage when working, you’re better served to have your own, separate coverage, should a disaster occur.
How Often You Use the Vehicle for Work
Whether you should have a personal auto policy, a commercial auto policy, or both on a vehicle often depends on how much the car in question is used for work. If you mainly use the vehicle for personal use with the occasional business trip, then you might be able to skate by without commercial auto insurance. We wouldn’t recommend it, as you could wind up in an accident when using the vehicle for business and lose all eligibility for coverage.
If the vehicle in question is used for business purposes only or more often, then you should have it under a commercial auto insurance policy. It would prove too risky to drive it uncovered by your personal car insurance.
Who or What Your Vehicle Is Registered To
This should be obvious, but if your vehicle is registered to your business, a personal auto policy won’t cover it. You need commercial auto insurance. Even if the vehicle is registered to you, if others often rent or lease it, you’ll still need that commercial coverage.
The Type of Vehicle In Question
Some vehicle types like box trucks, utility trucks, food trucks, and work vans can only be used for business purposes. If you try to insure them with a personal policy, your insurance agent will have some serious questions for you. These vehicles are for business purposes, and as such, need business auto insurance.
Why You Need Commercial Auto Insurance
Now that we’ve established who needs a commercial auto policy, you may wonder what benefits a commercial policy holds for you over a personal one. These benefits include, but are not limited to:
Coverage for You and Your Employees
Your personal auto policy might cover you driving a vehicle on the clock if it’s not for business purposes. However, if one of your employees drives the vehicle, they may or may not receive the same coverage. A commercial insurance policy would provide much-needed coverage for those who work for you.
Greater Limits of Liability and Broader Coverages
Commercial auto policies, in general, expect to be paying out larger totals of money if something were to go wrong on the clock. As such, they may have greater limits of liability and broader collision and comprehensive plans than a personal auto policy.
Coverage During Business Hours
The biggest benefit to any commercial auto insurance policy is the ability to drive around safely during business hours. Isn’t it worth the investment to protect yourself, your employees, and your peace of mind? Knowing you’re covered if something happens does wonders for your stress levels.
Need Business Insurance? We Can Help
If you or someone you know needs a commercial auto insurance policy and lives in the North Carolina area, we at Amistad Insurance Services are glad to help you! Our helpful agents are ready 24/7 to bring you the policy that best suits your needs. Reach out today for more information!
