Business insurance is a must for any budding, or established, business. With all of the different types of coverage, there are tough decisions to be made about the policies.
Commercial Vehicle Insurance is very business specific because it will not always be needed. Reasons why you must insure company vehicles are numerous. We will break down the term, find what to look for in it, and
Commercial Auto Insurance Explained
If you are running a business and use a car within the company, commercial auto insurance is needed. Cars used by businesses are not covered under a driver’s personal policy, and should anything occur while in the vehicle, the business foots the bill.
Property damage and liability for passengers need thought of
Like any type of insurance, the coverage amounts will vary from insurer to insurer. It your job to pinpoint what the company’s needs are and if the policies will cover them.
There will be several options for add-ons, so a personal representative to help you can be clear what features you must add-on to receive the desired result. BrokerLink car insurance can give you clear quotes and there is help available to chat about your many options.
What It Covers
Choose the coverage amounts in relation to real-life accident standards. These limits must be able to cover the worst-case scenario or your business will have to cover additional costs.
Deductibles need to be understood fully. While most assume the lower the deductible, the better, but sometimes you need to evaluate the chances of an accident, and what your business can comfortably afford as a deductible. The lower the deductible is, the higher the commercial vehicle insurance will become.
Many coverages make up a commercial auto policy, including:
- Bodily Injury Liability
- Medical bill payment
- Uninsured Motorist
- Property Damage Liability
- Collision Property Costs
- Towing Costs
- Rental Vehicles
Each policy looks different and is made up of the terms you agree to when signing on with the company. Many of these types of coverage will still cover your accident, no matter who is at fault. The uninsured motorist is in place in case another is liable, but they have no auto insurance in place.
If an accident occurs on your business’ clock including employees, commercial insurance will cover the incident when you’re at fault. This begins by filing a claim with the insurer and the damages will be covered, only to the point of the liability amount. Weather damage is also covered under commercial insurance.
When insurance does not fully cover an accident, umbrella insurance is a pricier option, that covers high amounts of damage. The limits on this insurance is by the millions, so it is for large corporations, or business with large vehicle risks, or fleets.
Do I Need Commercial Auto Insurance?
If you do any of these things with your business vehicle, it is an indicator that you need commercial vehicle insurance.
- The transport of any work equipment, especially hazardous materials.
- Newspaper delivery
- Chauffeur services like limo and taxi businesses
- Freight
- Towing vehicles
- Trucking and Freighting
There are some professions that are usually covered under personal policies, but these include low-profile jobs, where the car is not used excessively. Common automobiles used under commercial companies are buses, smaller trucks, taxis, limos. For larger vehicles like cargo trucks or large family equipment, you will need a commercial truck policy.
This is how you can protect your business financial, and will even help avoid future lawsuits for being poorly covered.
How To Purchase Commercial Auto Insurance
Receive quotes from multiple agencies, outlining the amount and type of vehicles and the drivers. Independent agents can discuss in person, which makes asking questions and receiving honest answers more likely. They can properly make you a package of coverage once they know your or the business’ needs.
Costs
The price of the company car insurance is depicted by the vehicle type, and the driving history of those potentially operating it. Take note of the employees who will have access to the car. If you have not hired people, ask about their driving record before you commit to them joining the team.
Company vehicles that are for businesses in construction or farming will usually be the least expensive. Fleet insurance is often given a discount, as well. Cargo vehicles can begin to get pricey to cover. The higher the weight limit, the more you can expect the insurance premium to be.
Tax-deductible
Commercial auto insurance can lower your taxes. Since it is used for business use, there are certain ways to claim it as an employment cost. You will need proof of the payments and the entire insurance details showing it is for commercial use. Mileage can also be allotted. For this, access Form 2106 from the irs, which details business expenses. Contacting a financial advisor versed in taxes will guide you along this path.
Personal Use of Your Commercial Insurance
Commercial Auto Insurance is not needed if you are only using a vehicle to travel to and from work, personal insurance covers this. Some personal insurance coverage has enough liability to work for commercial purposes. If it does not, commercial auto insurance is necessary. This is all case specific, so before speaking to an insurance representative make sure you know the amount of commercial use the vehicle will do.
If the vehicle is mainly covered under a commercial policy, other non-owners like family can use it as well. All you need is an endorsement to the policy to name them a user of the ‘non-owned vehicle.’
Delivery drivers
If you are delivering for a company, personal insurance will be enough coverage at most establishments. Talk to your insurance provider for full acknowledgment of the terms of the auto coverage. Include details about your profession, and if they suggest more coverage consider outside options before commiting to the heightened rate.
When you’ll be delivering counts toward the premium amount. For example, if you are only planning for a summer blight as a pizza delivery, there can be a discounted premium for the rest of the time. Non-owner coverage can be discussed with whoever runs the pizza company. This, however, does not cover any damage done to your car. It will give payouts for injuries of you or others, and any property damage incurred to other parties.
When deciding to use a specific vehicle for your business, know what type of coverage you need for it. Relying on personal insurance is unprofessional, and most of the time, will not do the trick come an accident.
