It’s Not Personal: Why You Need Commercial Auto Insurance

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Freddie Horacio, Negosentro | If you are a business owner, trying to rely on personal auto insurance alone can be a big mistake. There are several ways that your business will not be protected if you do not have commercial auto insurance.

Some Vehicles Won’t Be Covered

With personal car insurance, the insurance only extends to cars that are insured. This means that any new cars that you purchase and any cars that you hire or rent will not be covered under the liability insurance. Using personal auto insurance would lead to the hassle of having to insure individual vehicles.

Businesses Have Higher Liability

Businesses have much higher liability requirements than individuals. For example, businesses have to deal with employee liability, customer’s, equipment and work gear. Non-owned vehicles that are driven by your company will be covered under this insurance policy. If a business does not have auto insurance, it may not have the coverage for many issues that would not be a factor for those with personal insurance.

Employees Won’t Be Covered

It is a big mistake to not have commercial auto insurance if your employees will be driving your vehicle. While personal car insurance does not cover employees, commercial auto insurance does.

Your Insurance Provider May Deny Your Claim

Even when using a personal car for work purposes, this may be viewed as a commercial vehicle rather than a personal vehicle. Commercial vehicles are exposed to very different forms of risk. The personal policies are written taking the average needs of consumers into consideration. If you have an accident while on business, your claim might be denied. A pizza delivery man may have his claim denied because he is transporting commercial goods. A landscaper might have his claim denied because his truck comes with modifications such as racks and permanent toolboxes, which would lead to the vehicle being defined as a commercial one.

If you are only driving to and from your place of work, this is considered commuting and does not require business auto insurance. However, if you frequently travel to meet with clients, whether or not you should use business auto insurance depends on the frequency at which you do this and your profession. For instance, real estate agents, accountants, clergy, lawyers, doctors and consultants may travel to meet with clients on a regular basis, but may do so under a personal auto insurance policy. Home healthcare workers should only be required to obtain business auto insurance if they regularly transport

The Vehicle May Be Registered Under Your Business Name

Take a look at who the vehicle is registered under. If the vehicle is registered under a business name, it will definitely need commercial auto liability insurance. However, if the vehicle is registered under an individual’s name, it may still need commercial auto liability insurance.

Trailers Won’t Be Covered

If you will be hauling non-owned trailers, you will need commercial auto insurance. This form of insurance covers all non-owned trailers that are hauled under the interchange agreement. You will only have to pay your deductible once for claims on both a vehicle and the trailer.

You May Put Your Business In Jeopardy

Your financial institution may require that you carry commercial auto insurance. When a car is damaged in an accident and not sufficiently covered, you may not only suffer damages for your car, but also for your company. If the accident leads to damages suffered by others, the judge may award damages. This can consume the profits of your company and force you into bankruptcy. Or at the very least, commercial auto insurance will be the cheapest insurance if you have an accident.

Staying with your personal auto insurance company may seem convenient, but it will not be convenient at all if you do not receive adequate coverage. It is essential to have commercial auto insurance.

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