Insuring Your Business Vehicle Properly

Many people make the mistake of insuring a vehicle they use primarily for their business along with their personal vehicles. This can be a huge risk if you have an accident. In some cases, your insurance company can use the fact that the car was being used for business to deny a claim made on the policy. Without insurance coverage to rely on, you could be out a serious amount of money. Don’t expect your business insurance package to include a commercial auto policy. Businessowners policies (BOPs) do not cover auto insurance. You have to purchase that separately.

Any vehicle used primarily for a business should be insured with a commercial auto policy. Whether it’s a delivery truck, a passenger van, a pick-up truck, or even a privately owned car, you need a commercial auto policy. If your vehicle is only used occasionally for business, it might be okay to leave it on your personal auto policy, however. If your business has employees that use your business vehicle, it’s even more important to have a commercial auto policy.

Insuring your business vehicle requires the same level of coverage as your personal vehicle. This includes liability coverage, collision coverage, and comprehensive coverage. Most states have a liability minimum requirement dictated by law, but this is usually not enough coverage for a business. Collision and comprehensive cover the physical damage to the business vehicle caused by accident and non-accident related events such as vandalism and theft. These policies are not required by law, but they are a must have. Having at least $500,000 of auto insurance coverage is standard for small businesses, but $1 million is recommended. Most commercial auto policies use a combined single limit to define the amount of coverage, which means businesses have a greater amount of coverage for bodily injury and property damage.

There are three ways you can structure your commercial auto insurance policy. You can insure just the vehicles your business owns, the vehicles the business owns and hires, or all the vehicles used by the business. The last option is usually preferred because it provides coverage for all situations including when employees use their own vehicles to serve the business. This is also usually the most expensive option.

It’s best to shop around for commercial auto insurance policies. You’ll find quotes range in price greatly from one insurer to another. If you already have business insurance, which you should, start with your current insurer. You can often get a discounted commercial auto insurance quote from an insurer if you have other policies with that insurer. Don’t just accept that quote, though. You can get others to compare it to by searching it online or working with other insurance brokers.

To get the best price on commercial auto insurance, there are a couple things you can do. For one, hire employees to drive your business vehicles that have good driving records. You can check into potential employee driving records at the DMV. Also, consider buying or leasing vehicles that cost less to insure. Some vehicles are less expensive to insure due to low repair costs and other factors. Check with your insurer before buying a new business vehicle to learn how much it will cost to insure it.