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Commercial Auto Coverage for Your Small Business

Many small business owners across the country have a difficult time making sense of their auto insurance options and obligations. The type of work you do and the ways in which you use your vehicles have an impact on your need for commercial auto insurance. Some small business owners and even certain employees of companies really ought to have commercial insurance for their vehicles. Understanding some of the primary differences in coverage between personal and commercial policies can help you make the proper determination of which option is the right one for you.

Personal versus Commercial Policies

Many entrepreneurs at the helm of small business start-ups have personal auto insurance for all their vehicles at the outset of their foray into business ownership. This is understandable, since prior to the formation of a company, most of them never previously had any need for commercial auto coverage. However, once you get the ball rolling as a small business owner, the likelihood of your needing commercial coverage greatly increases.

One attribute greatly limiting the usefulness of a personal auto policy is its inability to specifically insure employees who may driver the vehicle from time to time, especially from insured losses that may occur while the employees are behind the wheel. A commercial policy is a great option for any business owner regardless of the industry in which you are working, because it gives you much greater flexibility to provide specific named coverage to employee drivers. Many personal auto insurance policies will not pay out at all if it has been found that your vehicle was being used for commercial purposes at the time of an accident. This is particularly easy for an insurer to question if your employees are the ones involved in such an accident.

Personal insurance policies may be cheaper to buy than commercial polices (although the price difference can be quite negligible in a lot of cases), but the limit of coverage and the chance for denial of claims in many situations makes them an inappropriate choice more often than not. For example, if you are the only person driving a vehicle and you are the title owner, you might have legal ground to stand on in an insurance case-although even in this type of situation an insurer has the right to insist on commercial coverage if the car or truck is being used for business purposes. Examples might include uses as seemingly simple as pizza, newspaper or flower delivery when you are the employee of someone else's business. In these cases, you need commercial coverage to assure protection; or alternately, your employer needs non-owned vehicle insurance as part of their commercial policy to cover your personal vehicle while it is being used for business.

But if you are a business owner and your vehicles are regularly being driven by your employees for work, you really need to have a commercial policy to make sure you are protected.

Benefits of Commercial Auto Coverage

As previously noted, commercial auto coverage can cost you more than a personal auto policy would for the same vehicle. But in many cases, this price difference is much less than you may think, often just a small dollar amount. What's more, the difference in up front cost is more than made up for by the increased coverage. For one thing, by buying a commercial policy when your vehicles are going to be used for business, you are ensuring that your policy premium is buying legitimate coverage that will not let you down when the time comes for you to make a claim. For another, commercial auto policies have much higher liability limits than standard personal auto coverage plans. This protects you to a much greater extent if one of your employees gets into a scrape with one of your cars or trucks while on the job or on the way to a job site.

Commercial vehicle coverage works to protect a wide range of vehicle types, including those suitable for any industry. It contains elective options like hired or non-owned liability coverage, which can protect you if you or one of your employees has to use a personal vehicle for work from time to time, or if you have to rent vehicles for different purposes. It extends the coverage of your commercial policy to these hired or non-business owned vehicles.

Even if you carry a personal umbrella liability policy, most of these policies specifically exclude liability protection stemming from business use of vehicles. A commercial liability auto policy picks up your coverage where your umbrella policy leaves off and fills in this important coverage gap. It can be used to insure just one or a few, or even a whole fleet of dedicated vehicles. Unbeknownst to some people, you can get a commercial policy even for vehicles titled in your name. In fact, any vehicle you own that is used primarily for business ought to have commercial auto insurance, regardless of whether it is titled in your name or the name of your business.

Commercial auto coverage can provide extra benefits as well, such as emergency roadside assistance. This can be of special interest to a business owner who owns larger vehicles that may be harder to maintain or repair, such as bread or box trucks or cube vans. The towing expense alone of getting one of these vehicles to a shop can be quite costly, so having this extra benefit can surely help the cash flow of a small business owner.

The Importance of Commercial Coverage

Other important extras that add to the value of a commercial auto insurance policy may include lease gap coverage providing payoff of a leased business vehicle totaled in an accident; additional temporary transportation expenses, which can keep your workers on the road doing their job while the covered vehicle is being repaired; glass repair deductible waivers which encourage policy holders to get their windshields repaired rather than replaced; and medical payments coverage for any employee drivers or passengers who may be injured in an accident in a business vehicle or while driving a personal vehicle for business use.

Whether you are just starting out in business or are a seasoned small business owner, you can quickly see how many different ways you can benefit from carrying commercial auto insurance for your car or fleet of vehicles. It is still important to remember that not all vehicular uses require commercial insurance, and in some cases it is appropriate to maintain personal coverage in lieu of switching to a commercial auto policy. but with that much being said, in the vast majority of cases, even when the legal necessity for commercial coverage is not clear-cut, the advantages of carrying a commercial policy tend to far outweigh any increased monetary costs they may present versus continuing to carry only a personal auto policy for you vehicles.

As a small business owner, one of the first decisions you need to make is how to best protect yourself and your employees from liability issues and other potential insurance hang-ups. The best way to do this in your auto policy is to opt for commercial coverage.



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