Insuring Your Business Vehicle

Summary: Sure, you have personal auto insurance for your vehicle that you use at the same time for your business. But does your policy cover the risk involved in case of an accident that occurs on a business trip?

Read on and learn all about commercial auto insurance from our basic guide.

If your business uses a vehicle or a number of vehicles for its operation, commercial auto insurance is one item you have to consider when reviewing your risk management plan. If you have a personal auto policy for your vehicle, it could be that it excludes coverage for commercial use. In that case, you don’t get reimbursement for repair or replacement of the car or money to pay the expenses of people harmed by an accident in case your vehicle is involved in one on a business trip. Or in case the vehicle is stolen, you won't recover anything. Checking the provisions of your personal auto insurance or personal umbrella liability policy could clarify whether your vehicle is adequately insured.

Commercial Auto Insurance Coverage

Commercial auto insurance coverage is usually based on the number of vehicles, the number of drivers to be insured, and the type of vehicle to be insured. Knowing these, it is important to consider insurance rates for certain types of car or truck when deciding what vehicle to buy or lease and to consider getting a fleet insurance over individual vehicle polices if you are operating a fleet of vehicles.

Commercial Auto Insurance Premium

Premiums for commercial auto insurance will also depend on the business location, the driving records of your drivers, and the extent at which your vehicle have gadgets and protection against theft and damage to passengers when involved in an accident. And so, when buying or renting a vehicle, check whether at a comparable price, you can get one that has safety devices like automatic seat belts, and anti-lock brakes and anti-theft gadgets. The higher the safety rating of the vehicle is, the lower the premium would be. Another factor that could lower premium is the deductible amount of the policy. It is the part of the claim that you are willing to pay yourself. That amount is deducted from the total claim that must be shouldered by the insurer. The more you are willing to pay, the lesser the premium would be.

As an added protection, you can also buy a non-owned auto policy, which is useful when other cars, yours, your employee’s or someone else’s, are being used for business purposes. If your vehicle is being used as official company car, the business name should appear as the principal insured in the policy to make claims processing uncomplicated in case you have to. Make sure the same is true in case you are leasing a vehicle.

For particular transport businesses, some other insurance requirements must be met with federal and state regulators.