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Advantages of Business Car Insurance

The question of whether to purchase business car insurance is a common one. All across the country, hundreds of thousands of entrepreneurs enter into business for themselves each and every year. While a few of them immediately form large corporations with a large stockpile of assets and numerous employees, the vast majority start out on a much smaller scale. The truth is that the term "small business" is kind of misleading. For one thing, these types of businesses make up a large part of our overall national economy; for another, no business is small with respect to the amount of work and dedication needed to get it off the ground and keep it going.

Business Coverage Protects the Business

Business car insurance is one of many important ways you can protect your growing business from financial strain and uncertainty. In many cases, business owners immediately recognize the need for a business or commercial auto policy. If you have worked for a family-owned business for many years and have spun off your own company, chances are you have learned a great deal about how to run the business from your prior employment. If your old company had business insurance for its vehicles, you probably will too.

But in other cases, new business owners are in the first generation of ownership, either setting out into a new or emerging field, or simply entering an existing one slowly by using their own vehicles and equipment in the beginning. In many cases, business owners use vehicles titled to them in the first few years of their existence. Some of them believe that the only time you need business car insurance is when you have a vehicle titled to a company. This is surely not the truth.

In reality, the need for business car insurance is dictated by the use, not the ownership, of the vehicle or vehicles in question. There are many specific rules and ways you can evaluate your own personal situation to try to decide whether yours calls for a business insurance plan, but there is one hard and fast rule that applies virtually all the time to pretty much every circumstance. If you use a vehicle for business purposes, chances are you need business insurance. Getting a business policy protects your business because it protects you from the financial peril that can accompany a denied claim based on vehicle use following an accident or other event.

Vehicle Use Determines Insurance Needs

As mentioned previously, the way you use your vehicle is the one and only barometer you should use to decide whether you need business car insurance coverage. Many independent contractors in different fields do not even realize that their personal auto insurance policies could very well be useless. Your auto insurer could deny your claim if you get into a scrape while working in or out of your personal vehicle. For example, a caterer making a delivery or driving to an event with a van full of food and decorations could be denied in the event of an accident.

The same is true of other delivery workers, like pizza drivers, newspaper delivery people and others who use their personal vehicles for business deliveries. There is an available non-owned vehicle coverage that businesses can get on their commercial policies. If you are the employee of someone else's business and you use your personal car or truck to make deliveries (even just delivering yourself and other workers to a job site), you need to find out whether your company includes non-owned coverage on their business insurance plan. If, however, you are an independent contractor and not an employee (as newspaper delivery workers often are, for example), it is likely your responsibility to get your own business auto coverage to ensure you are covered.

Simply having a business car insurance policy rather than a personal policy ensures that you will be covered in the event of an accident or another claim. It gives auto insurance companies one less out when it comes time to respond to a claim. If you are an independent contractor of any kind and you use your car or truck for work, you need business car insurance.

Business Policies have Distinct Advantages

When you compare the coverage offered in your personal auto insurance policy with that included in a business insurance plan, you will no doubt see that business policies have distinct advantages over personal auto plans. One specific advantage already discussed to some extent is in the area of the certainty of coverage. Business owners need to know that all the money they are spending on auto insurance coverage is actually going toward something tangible and positive. There is a potential trap for some of us who see the possible lower cost of keeping our personal policy and taking a gamble on coverage as a way to save money. But this kind of thinking can backfire if one of your workers is seriously injured while driving your car or truck, for example. Business car insurance is a smart investment for any business owner because of the certainty of coverage it offers.

Another huge plus is the actual limit of coverage. Most business car insurance plans come with much higher liability limits than standard personal auto policies. This can save you from severe financial distress in the event of a claim. With expensive equipment being driven around, and with various employees driving your vehicles, there is a great need for comprehensive coverage that will protect you when the unexpected occurs. Some small business owners do not realize how big the potential costs of such an accident could be when it does not involve a family member listed on their personal policy.

This brings us to the next advantage of business car insurance. For the (usually small) extra cost of coverage, as a business owner you not only get much higher liability limits, but you also get specific coverage for all your drivers. This means each of your employees who are eligible to drive your vehicles can be specifically named on the policy. When accidents happen, their medical care and other expenses will be taken care of, leaving you with one less thing to worry about when all you should really be focused on is the condition of the injured employee.

A wide range of workers really ought to have business car insurance. Real estate agents who drive clients to see houses, and day care workers who transport children to field trips, are just a few examples among many that some of us just don't think about in terms of the need for business coverage. This type of coverage can even be a source of savings for the policy holder. In one sense, it is based on time: if your business operates only during a specific range of hours during the week and the vehicles are not authorized to leave the shop the rest of the time, your rates will reflect this. In a personal policy, your rates are based on constant access. There are many reasons to take on a business car insurance policy, but the biggest of all is simply to protect yourself.



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