Auto Insurance for Businesses – What Is It?
Vehicles that are used for business purposes must be insured by a company that specializes in commercial insurance. Among the numerous possibilities:
Own a small business that makes use of a vehicle in any capacity and is run solely by yourself or another self-employed person (other than commuting from home to the office).
Paying someone else to drive your vehicle means that you are responsible for their insurance. It is the employer’s duty to ensure that the vehicle is adequately insured with the appropriate coverage when being used for business purposes. Commercial auto insurance is required for any vehicle used for business purposes, no matter how many there are. The good news is that business auto insurance deducts the cost of any company vehicle insured under it.
It is your responsibility to ensure that a company vehicle is insured solely for business use when an employee is paid to drive their own vehicle for work purposes. If, for example, you run a handyman service and all of your employees drive their own trucks, you’ll need to provide them with commercial auto insurance.
Non-employee contractors are required to carry their own auto insurance. Contractors aren’t responsible if they don’t meet your standards.
Commercial vehicles are a significant expense for any contracting business. To protect these priceless assets, it is critical that they are properly insured. This article will examine the coverage, costs, and advantages of commercial auto insurance to assist you in making an informed decision.
Liability insurance protects you in the event of an accident in which you cause injury or death to another person or damage to another person’s property.
No matter who is at fault for the accident’s injuries or damage, personal injury protection pays for all of the associated medical costs.
If your car is damaged in an accident, collision insurance will pay for the costs of towing and repairs or replacement. While you wait for repairs or a replacement, you may be required to pay for a work-appropriate rental car.
It is illegal for a driver to be uninsured. What happens if your car collides with an uninsured motorist––meaning that the other driver would be unable to pay for damages––is covered by your insurance policy. Depending on the terms of the policy, this coverage may also cover the costs incurred by an underinsured driver if their own insurance policy does not cover the damages.
All-inclusive protection: This type of insurance covers the costs of repairing and/or replacing your car in the event of damage caused by theft, vandalism, flood, fire, or any other object or vehicle.
Is Commercial Auto Insurance Necessary?
The short answer is: It all depends. Whether or not you require commercial auto insurance is a function of your line of work or business. The following are a few professions or situations in which commercial auto insurance is required:
Bring in money by transporting people or things for a fee: Consider this scenario: You’re going to need insurance if you work for an Uber-like company such as Lyft or UberX. Commercial auto insurance is a legal requirement for anyone who drives a company vehicle for business purposes.
Use your vehicle to perform a service: Bus? a tow vehicle? Snowplow? No, it’s not. Commercial auto insurance is required if you use your vehicle to provide a service.
Due to the nature of your work, you may require additional liability coverage. Having adequate professional liability insurance is essential if you are responsible for transporting the elderly on field trips or in any other capacity. A commercial auto insurance policy is required for any reason that puts you or your passengers or your cargo at greater risk for injury or damage.
Managing a fleet of vehicles: Regardless of the size of your fleet, the more vehicles you own, the more insurance you need.
If you’re transporting heavy loads––tools, equipment, cargo, etc.––your vehicle is at a greater risk of damage and requires commercial auto insurance, which can be expensive.
Isn’t the vehicle yours alone: It doesn’t matter if the vehicle is registered solely in the name of the business or if it is shared by several employees who use it for business purposes; commercial auto insurance will insure everyone who uses it. Commercial auto insurance is necessary if your group of drivers frequently changes.
There are some people who incorrectly believe commercial umbrella insurance covers vehicles. Get in touch with us today to make sure your business has the proper auto insurance coverage.
Examples of Commercial vs. Private Auto Insurance
Auto insurance for business and for personal use is divided into two distinct categories because it provides coverage for two very different kinds of risks. Only vehicles used for business purposes can be covered by commercial auto insurance. When you’re driving your car for personal reasons, you need personal auto insurance.
Using your car for work may be excluded or covered only to a limited extent under most personal auto insurance policies. Commercial auto insurance would not cover any losses or damages if you were to use a business vehicle for personal purposes. That is why you require both. Examples of how the two are used in similar situations:
Insurance for commercial vehicles
- Insurance for your own car
- Delivering food to customers who have paid for it
- On the way to the job site, you stop to buy coffee for your coworkers.
- Picking up clients from the airport in a company car
- Driving to the airport with friends to begin a vacation
- Your truck will be used to transport construction supplies and equipment to the job site.
- Traveling to and from work each day
- Driving around the city to various job sites
- Going away for the weekend
- Transporting customers who have paid for the service (such as a rideshare)
- Attending a weekend party as the designated driver
- Exactly how much does it cost to get commercial insurance?
Insurance premiums for commercial vehicles are a little higher than those for personal vehicles because they provide more coverage and higher liability limits. Factors that affect commercial auto insurance rates include:
the total number of automobiles covered by the policy
What is the purpose of the vehicles? Who will be driving them? (driving records matter)
Your company’s specific requirements
Commercial auto insurance policies should be tailored to each company’s specific needs because each business is unique.
Contractors’ Liability Insurance for Small Businesses
Getting the right type of insurance for a contractor can be a bit tricky. Contractors’ liability insurance covers them in the event of a lawsuit arising out of an accident on the job site or the use of their materials, as well as any injured workers. As a result, business owners in certain industries must purchase both commercial auto insurance and contractors liability coverage.
All events that may occur while the vehicle is used for business purposes are covered by commercial auto insurance. Commercial auto insurance is a requirement no matter what type of business you are in, be it plumbing, roofing, or even driving an Uber.
Let us do the legwork for you and find the lowest possible insurance rates. Let Contractors Liability know about your company, and we’ll work with you to find the most cost-effective policy to meet your specific requirements.