A common problem many business owners face is understanding the right type of insurance they should carry on their vehicle. It can be confusing when using a car for both personal use like going to the grocery store and business use, like taking clients out to dinner. And using your vehicle for both could present some coverage gaps. It’s essential to protecting your business, you understand the differences between the two types of insurance.
Commercial Auto Policies vs. Personal Auto Policies
As mentioned above, your personal auto policy provides coverage for daily activities like commuting to the office, taking the kids to soccer or heading to the hardware store. Auto insurance covers the vehicles and household drivers explicitly that you list on the policy. Also, the policy must be in the name of the individual owner of the car. If it is titled to a business, it cannot be on a personal auto policy.
On the flip side, a commercial auto policy is designed to cover business owners or companies that use their vehicles primarily for business. Examples would be, a florist who delivers to customers, landscapers or other contractors that have trucks on the road, and caters who provide a delivery service.
Commercial auto policies have many of the same coverages but offer higher liability limits and other broader coverages. This is why they are rated differently than a personal auto policy.
Vehicles that are in the business name, or are trucks, vans or buses that are for commercial use and have a specific gross vehicle weight will need to be written on a commercial auto policy.
Businesses have different needs, such as drivers requiring special licenses and vehicles used for transporting certain items require special fillings. Commercial auto insurance addresses these unique exposures.
Car Insurance for the Self-Employed
Not all business owners who are self-employed need a commercial auto policy. For example, if you are someone who works from home, like a graphic artist, you may drive your car to a business meeting, but other than that is it a personal use vehicle. A personal auto policy should be sufficient. However, if you bake cakes from home and use the car for delivering your items, a commercial auto policy would be necessary.
When in doubt, it is helpful to think about it this way. If you transport products or goods, people, or have unique business-related features or equipment in or attached to your vehicle; you need a commercial auto policy. You should also carry a commercial auto policy if your employees drive your car or if you lease or rent vehicles to others.
As a business owner, you have much to lose. Make sure you have the proper coverage in place. You don’t want to discover at claim time you have no coverage because you are using your vehicle for business use. A significant auto accident with injuries could bankrupt your business.
A proper commercial auto insurance policy is very affordable and the best way to protect yourself and your business. Contact us today for a fast and easy commercial auto insurance quote.