What to Know About Commercial Auto Insurance for Small Businesses
Commercial auto insurance is essential for any company that uses cars, trucks, or other vehicles in the course of business. When you own a company, you take on a greater level of risk than someone simply using a personal car, so you need a business auto policy that provides you with the right level of coverage.
Whether you’re an entrepreneur using your vehicle for business purposes or the owner of a growing small business with your own fleet, properly insuring company vehicles will keep you on the track to success.
What Is Commercial Auto Insurance?
Commercial auto insurance is a policy that covers vehicles you use for business purposes. It can cover company cars, vans, pickup trucks, semis, food trucks, utility vehicles, and other kinds of specialty vehicles. Your commercial policy can help pay for vehicle damage, medical bills, property damage expenses, and even legal costs related to a covered event.
Key Differences from Personal Auto Insurance
Commercial auto insurance explicitly covers situations that occur when using a vehicle in the course of business, while personal policies only cover personal use. Because business owners typically have a higher level of liability than individual drivers, commercial plans usually have higher policy limits and additional protections for entrepreneurs.
Types of Coverage Available
Just like with personal plans, you can customize your policy with different kinds of coverage. That includes:
- Liability protection
- Comprehensive
- Collision coverage
- Personal injury protection
- Uninsured motorist protection
You can also get specialty business auto plans for different situations. For example, you can get fleet insurance to cover multiple cars at once. Or, you can get non-owned vehicle insurance for your business, which covers any personal vehicles your employees use for work reasons.
Why Small Businesses Need Commercial Auto Insurance
Every small company that relies on vehicles should have car insurance. Not having liability coverage for your business vehicles could have serious legal and financial consequences, which is especially devastating for small businesses.
Liability Protection
As a business owner, you want to take steps to decrease your liability in the event of an accident. If you or your employees cause an accident in a company vehicle, you’ll be on the hook for any damage caused. That includes vehicle repairs and medical bills for the other party. You could also be open to costly legal action, which can quickly add up. The right policy will give you coverage for all of these liabilities.
Physical Damage Coverage
Along with limiting your financial responsibility to other parties, your insurance also protects your assets. Your plan will pay for repairs if you get into an accident, helping you keep your vehicles in good condition and limiting disruptions to your work. It can also cover other common business claims, like theft, vandalism, and weather damage.
Employee Safety Considerations
You have a responsibility to keep your employees safe while they’re working. Having insurance is an integral part of protecting your workers and ensuring they can get appropriate care if they’re injured in an accident.
Tips for Choosing the Right Policy
Small business vehicle coverage can include numerous exceptions, exclusions, and coverages. It’s essential to customize your policy based on your specific needs. Talk to your insurer about how many vehicles you want to cover, what kinds of vehicles they are, and how you use them. The more specific you are about your situation, the more you can customize and curate your policy.
Factors That Affect Premiums
The cost of commercial auto coverage can vary significantly depending on the risk factors associated with your work. When comparing quotes, keep in mind the different factors that might be impacting your monthly costs.
Vehicle Type and Usage
Certain types of vehicles are more costly to insure than others. Plus, the more you use a company vehicle, the higher your risk of getting into an accident. If you have specialty vehicles in constant use, your premium will likely be higher than if you have a regular company car used only occasionally.
Driving Records and Claims History
When calculating your commercial insurance rates, insurers look at your past driving behavior. If you and your employees have been involved in several accidents, your premiums will be higher. Carefully vetting your employees and ensuring that all drivers follow traffic laws can help you get in fewer accidents, make fewer claims, and avoid premium hikes.
Business Industry Risk
Your industry can have a significant impact on your risk level as a policyholder. Industries that rely heavily on company cars, such as delivery and trucking, will often have higher rates. Companies that commonly transport hazardous materials, such as lawn care or pest control businesses, may also have higher premiums.
Protect Your Business Vehicles Today
Business auto insurance is an essential tool for protecting your business assets and limiting your liability while company cars are in use. If you or one of your employees gets into an accident using a commercial vehicle, you’ll want the support of a dependable business policy to pay for repairs and get you back on the road.
Insuring your company vehicles is easy at Freeway Insurance. We’ll help you assess your business risks and design the perfect plan for your needs, from fleet insurance to non-owned auto policies. Protect your company today by finding the right plan by visiting a local Freeway location, getting a free quote online, or calling us at (800) 777-5620.
Frequently Asked Questions Commercial Auto Insurance
Do I Need Commercial Auto Insurance If I Only Have One Vehicle?
Even if you only have one vehicle, you should still get commercial coverage if you use that vehicle for business purposes. Personal auto policies typically have exclusions for commercial use, which means that you aren’t covered if you use your personal car during the course of business. Regardless of how many vehicles you use for your company, you should have a dedicated commercial plan that covers commercial use.
Are Employee-Owned Vehicles Covered?
Standard commercial auto plans don’t usually cover employee-owned vehicles, but some types of specialized coverage will. If your workers have personal vehicles that they use for your professional purposes, you can get something called a hired and non-owned policy. This essentially extends your commercial coverage to any vehicles your employees use for work-related tasks, even if you don’t own them directly.
Can I Bundle Commercial Auto with Other Policies?
Yes! You can bundle your commercial auto coverage with any other policies for your small business, including general liability and commercial property insurance. Bundling your plans makes it easy to keep track of your coverage in one place and can even unlock special multi-policy discounts.
