Most people use their car for business occasionally. Technically everyone who commutes to work is sort of “using their car for business.” So how do you know when it’s time to get your business a commercial auto insurance policy? It usually depends on how much your business relies on vehicles, whether there are vehicles in a “company fleet,” and whether your employees travel for work.
Why Is Commercial Insurance Important?
Why can’t you simply use your own auto insurance policy? Why can’t your employees use theirs? When someone gets into an accident while completing work for a business, the company itself can be considered liable. And that means that it is possible that someone might go after the company for their personal property and medical costs.
Commercial auto insurance protects you from this. Your commercial auto insurance policy will give you additional coverage for vehicles that were purchased by the company or for accidents that happen during the course of work.
What Vehicles Are You Using for Business?
It’s obvious that you need commercial insurance if you have a fleet of commercial trucks. But what if you’re just using your own personal car for business? If you only use your personal car to go to and from work, then you probably don’t need commercial insurance. But if you use your personal car to go to a number of client sites a day, your risks may be greater.
The heavier your vehicle is, the more likely it is to cause damage. Sedans and coupes are going to represent a lower level of risk than heavy-duty trucks and sedans. This is another thing that you should consider.
Further, if you do work with your vehicle, it’s important that you get commercial insurance. For instance, you might have a truck that you respond to calls with, and you might occasionally transport equipment on that truck. This increases the amount of risk involved.
Do Your Employees Travel for Work?
Do you have employees traveling often from site to site? Even if they are using their own personal cars, there are some reasons that you should still have commercial auto insurance. Employees have a higher risk of an accident if they are traveling often, and an employee getting into an accident will either need to use their worker’s compensation insurance or be compensated by the business.
Because of this, having additional commercial auto insurance can help. Employees will also need to get their vehicles repaired quickly if they are using it for work, and as their employer, you have a vested interest in making sure they can get to work quickly. If an employee is at fault for an accident and someone else is injured, it is possible that your business could be considered liable.
Even if your business is ultimately not considered to be responsible for an accident, it could still lead to costly litigation. Your insurance company will be able to handle this for you, in addition to negotiations and repairs.
Compounding this problem is the fact that you can’t guarantee your employees have auto insurance. Though you can ask them to provide proof of insurance when hired, they could let their insurance lapse and then get into an accident. If you don’t have commercial insurance, the full burden could fall upon you.
When Don’t You Need Commercial Auto Insurance?
You don’t need a commercial auto insurance policy if you only use your car to commute to and from work. If your business does not own any cars and your employees do not need to travel while they are working, you should be able to rely on your personal insurance.
Are you still not certain whether you need a commercial auto insurance policy? Do you need one, but aren’t certain where to start? A professional can help. The experts at Family Insurance Centers will be able to advise you on the right insurance for your needs.