When it comes to commercial auto insurance, you might think that only fleet owners need to worry about purchasing coverage. But any business that uses a car for work should think about getting a commercial auto policy.
Even if your company doesn’t own any vehicles, an employee could use their personal car for work and require commercial auto insurance as part of their employment benefits package. This can protect them (and the business) from liability issues related to an accident or other incident involving the car being used while on duty.
Most people use their personal cars for business purposes, but personal auto insurance policies are simply not enough. This article will talk about some of the most important reasons why you need auto insurance, as well as the types of business vehicles that insurance companies usually cover.
Why is Commercial Auto Insurance Important?
Commercial auto insurance is an essential financial protection for your business. This kind of coverage will mean your insurance company pays for damage to company-owned vehicles and other vehicles in the event of an accident and also provide liability coverage for bodily injury or property damage for which your company is deemed at fault. You wouldn’t want your business to be responsible for paying damage costs caused by a commercial vehicle accident.
Additionally, most states and provinces require commercial auto coverage when you use a vehicle for business purposes, even if it’s a personal car. Not only will you avoid legal fines by buying commercial vehicle insurance, but you will also be on the safe side in case of an accident.
The following types of businesses would need to purchase commercial auto insurance coverage:
-
Any company that operates a vehicle for business purposes.
-
Any business that transports goods or people
-
Any company with a fleet of vehicles
Vehicles That Commercial Auto Insurance Covers
Taxi or Limousine Services
Taxis and limousine transportation is booming, with ride-share services like Uber and Lyft becoming more popular than ever. As a result, taxi and limo drivers need business auto insurance to cover their vehicles when carrying passengers. Commercial auto insurance covers:
-
Drivers
-
Passengers
-
Your company as a whole
Delivery Services
The business must carry commercial auto insurance if you own a delivery service (postal deliveries, food, beverages, flowers, prescription medications, and newspaper delivery). This type of insurance covers damage your vehicles may cause in the event of an accident or other incident, including damage to other cars.
Business insurance also covers medical expenses for drivers and passengers in other cars due to crashes with your company’s vehicles.
Courier Services
Couriers convey products to others. Couriers deliver parcels, food, prescriptions, newspapers, and more. Businesses that need fast or secure delivery use courier services.
If you own a furniture store, you need vehicles to deliver goods. You'll need commercial insurance to manage your business.
Towing Companies
If you're a tow truck service, your fleet will likely be involved in various accidents and collisions. And when this happens, your business must have commercial auto insurance coverage.
Of course, you'll need to evaluate the specific risks associated with transporting other peoples' vehicles before determining what coverage will work best for your operation.
Household Movers
Household movers transporting other peoples' property must also have commercial insurance coverage. In this case, the household mover must be licensed and registered with the state and have a commercial auto insurance policy. They may also need to carry a bond or escrow account to cover damages for which they are responsible.
A Personal Vehicle That Is Also Used For Work
A commercial auto insurance policy is designed to cover your vehicle when used for business purposes. This includes any vehicle you're responsible for, either owned or leased.
If you use your personal car for work purposes, or if you use a leased car for work purposes (and have been notified of this by the leasing company), then it can be covered under this coverage option as well.
The best way to determine what type of coverage you need is by contacting an agent specializing in commercial auto insurance policies and asking them about their plans' eligibility requirements and exclusions.
Contact the Commercial Auto Insurance Specialists in Dallas
Being responsible for the safe operation of a business or personal car is essential for anyone who owns a vehicle. While a general liability (or auto) policy is sufficient for protecting your personal assets from liabilities associated with operating a car for yourself, a commercial policy is necessary to protect your company's assets from risks posed by third parties and motorists.
That said, operating a commercial business, such as a taxi service or limousine company, can be complex and challenging at times. As such, you may want to avoid the commercial auto insurance cost. However, it can save you and your business in case your business vehicle is involved in an accident.
Contact Thumann Agency today at 972-991-9100 for a commercial auto insurance quote.