Should You Obtain Business Auto Insurance for Your Business

The world is fraught with peril, and insurance coverage can help to protect you from financial ruin. A business is no different; you need insurance to protect your business and your interests. Many business owners are unaware that they should buy commercial car insurance in addition to the usual business insurance.

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Not having business car insurance puts you and your business at risk. You need to ensure that your business is completely covered on all ends by purchasing commercial auto insurance.

It is not hard to find business auto insurance; it is quite like the search for private car insurance coverage. However, just like every driver has different insurance needs, your business likely has unique commercial vehicle insurance needs as well.

Other Insurance Won’t Cover You

Many business owners believe that other insurance packages they purchase will cover the vehicles that they use in their business. This is especially true of small business owners that utilize their personal vehicles for business purposes.

However, most private auto insurance providers won’t cover damages or loss that occurred when a personal vehicle was being used for business purposes.

Furthermore, many business owners believe that their business owner’s liability insurance has coverage for their commercial vehicles. Generally, a business owner’s policy, or BOP, does not include auto coverage, according to the specialists at the Insurance Information Institute. If you need business car coverage, you must specify that you want it with your insurer.

For home-based businesses, homeowner’s insurance is not nearly enough to cover a vehicles’ worth. According to the National Federation of Independent Business, your homeowner’s policy will usually only provide $250 worth of coverage outside of the home.

Protect Your Assets

It is important to have business car insurance to protect you and your business.

First, without coverage, you may be left with the bill if you get into an accident or suffer another loss with your commercial vehicle.

Injuries and damages can cost into the tens of thousands of dollars. Most small businesses do not have the capital to pay for injuries and repairs out-of-pocket.

Next, you will also not have any coverage to pay for your liability if your business’s vehicles are the cause of an accident that harms other people. Your business, and you by extension, will be responsible for the injuries and vehicle damages to others.

That leaves you and your business open to being sued. Unless you have incorporated your business, then you can also be named in a lawsuit. Generally, people are much more likely to pursue a lawsuit with a company than with an individual because they think that a business has more assets to pay a substantial claim. However, such a lawsuit may very well be the end of your business.

Business car insurance will be there for you in the event of an accident, theft, or other loss. Most providers include the cost of defending you and your business in court as part of your policy so that a lengthy lawsuit will not hamper the day-to-day operations of your business.

Coverage Basics

Coverage for commercial car insurance is pretty similar to private car insurance. First, you need to have coverage for liability. This coverage will pay for the injuries and damages that you cause to other drivers and their vehicles. While state minimums are still in effect, most experts advise that you get a large amount of liability coverage.

While every business will have different needs, the Insurance Information Institute recommends that every business have at least $500,000 in liability coverage.

This is to ensure that you have enough insurance to cover all damages and injuries from a very serious accident that might include multiple vehicles.

Some businesses choose to get an umbrella policy to meet the high demands of their liability, according to a NY Times article. Generally, an umbrella policy covers liability above and beyond what is provided in your normal insurance packages. It can cover you for multiple areas, hence the name. Most umbrella policies are relatively inexpensive and start at $1 million in coverage.

You also probably need to have optional coverage such as collision and comprehensive with your commercial auto insurance. These two types of coverage pay to repair your business’s vehicles. Collision covers the repairs for your vehicle from an accident, minus a deductible; and comprehensive pays for damages from everything else. Comprehensive also includes a deductible.

Most businesses do not have the assets to replace or repair a vehicle that is damaged in an accident, stolen, or ruined in a fire or flood. Commercial auto insurance will ensure that your business’s vehicles will be repaired or replaced quickly.

Some states might require that you carry uninsured/underinsured motorist coverage or other coverage that pays for medical bills, such as personal injury protection or PIP. This is to ensure that you or any employees injured while operating one of your company’s vehicles will have their injuries taken care of.

Review Your Needs

It’s very important for you to assess your particular business’s needs for commercial car insurance. Not all companies will have the same amount of risk. If you are a small business owner who uses your personal vehicle to occasionally run business errands, then you likely don’t need that much in the way of coverage.

However, some businesses out there have multiple vehicles, or even a fleet of cars, trucks, or vans that all require coverage. Where those company vehicles are driven on a daily basis will affect your company’s risk a great deal. Driving on highways and in major metropolitan areas will increase your risk. Additionally, allowing employees to drive your company’s vehicles will also increase your risk.

Utilizing an agent might be your best bet to truly evaluate all of your company’s needs for commercial car insurance, as advised by the U.S. Small Business Administration.

An agent can help you to determine the particular risks of your business and assist you in finding coverage to meet those risks.

Furthermore, all insurance experts advise that you review your company’s insurance needs at least once a year. Perhaps you have hired employees, added a storefront, or expanded your business into new industries. Whatever the case, you likely have different insurance needs than you had before. It is important to review the insurance needs of your company often to ensure complete coverage.

Where to Find Business Car Insurance

It’s very easy to find a provider for your business car insurance. Most major insurers offer commercial lines for car insurance as well as private lines of car insurance. Call your personal car insurance company or look on their website to see what other lines of insurance they sell.

Furthermore, the company who provides your business liability insurance might also be able to provide you with commercial auto insurance as well. Again, contact your business liability insurance provider or utilize their website to find out if they can also provide business car insurance.

You may be able to bundle services for all of your different insurance needs. As a business owner, you likely have private auto insurance, home insurance, business liability insurance, health insurance, and possibly worker’s compensation insurance. Any one of the providers for your other insurance packages might also be able to offer you business car insurance.

Bundling services can save you time and money. You only have one bill to remember to pay every month, and most providers include a discount for having multiple policies with the company. An agent can assist your company in this search.

Additionally, there are some insurance providers out there who specialize in providing coverage for specific industries. The transportation industry for both people and goods is one example of an industry that can find a wide array of specialized insurance providers. A specialized insurance company may be the right one for your company. Again, an agent will be able to assist you in finding the best insurance provider for your business’s needs.

Compare Prices and Ratings

As with all things insurance, the best way to find a great policy is to shop around and compare prices from many different insurers. That is truly the only way that you will know how much any insurance company will charge you for coverage.

You can compare prices with an agent, by contacting each insurance company directly, or by utilizing the Internet. Most commercial car insurance providers will have a website that offers quotes. Additionally, you can also utilize quote comparison websites.

Make sure that you indicate that you are looking for business auto insurance, and also utilize the same amount of coverage for every quote that you get. You cannot truly compare the quote of one company to the quote of another company if the quotes are not for the exact same amount of coverage.

If you are unfamiliar with the auto insurance provider, then you should do some research to ensure that they are a good company with which to do business. Research ratings concerning the insurer’s financial strength and customer service reputation. This will ensure that your company is utilizing an insurance provider who will always be there for you no matter what your need.

However, the most important point is that you get business auto insurance in the first place.

Then, you can have peace of mind to know that your company is completely protected.

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