Commercial or Business Auto Coverage, Why Would I Need It?

It’s obvious if you operate a business as a trucker, an auto service garage, Taxi, Limo service, a tow company, or a motor carrier, you will need special forms of commercial insurance related to driving commercial vehicles and specific to your operations. Other businesses may believe that commercial or business auto coverage is not necessary because they feel they pose no risk beyond what anyone driving in their personal auto would. This post is addressing those who operate a business, but who think they don’t pose a risk that warrants the purchase of commercial or business auto coverage.

Did you know that if you’re an owner/operator with no employees and insured on a personal auto policy, you still have the risk that in the event of an accident while driving on business, your carrier could deny the claim for bodily injury and property damage as well as medical payments? (Medical payments cover the cost of immediately necessary medical payments or funeral payments caused by the accident). This is because many personal auto policies EXCLUDE business use of the vehicle. This exclusion could easily cause a business owner to lose their business and/or personal assets in the event of a lawsuit brought after a terrible accident.

In addition, for businesses who have employees who drive on behalf of the company there are some coverages that may be added for the best protection. Non-owned auto coverage offers liability coverage for employees, volunteers, or independent contractors who operate in connection with the business. This coverage is considered excess coverage and will “kick in” after their personal auto coverage is exhausted during a claim. An employee who doesn’t own a car and has no personal auto policy wouldn’t be covered on a business auto policy without an endorsement called “drive other car”. Employers who want complete assurance that they’re covered with regard to all employees should add coverage for “non-owned auto liability” coverage and “drive other car” coverage to their commercial or business auto policy.

In conclusion, when applying for commercial or business auto coverage, most policies will be for “specified autos” so you’ll need to give all identifying info for each vehicle so have the make, model, year and VIN available. When new vehicles are added, the info for each new vehicle should be provided to the carrier. You will also need to provide information for each driver specified on the policy. Commercial auto is rated similar to personal auto (based on territory, specified vehicles, and driving records). Then, if you have incidental drivers who drive their own vehicles on business errands, add non-owned auto coverage and if you have any employees who don’t own a vehicle but may drive a company car, be sure to add “drive other car” coverage.

Our agency has access to many commercial auto carriers, including Progressive, Hartford, Safeco, Century National, Commerce West, Sparta, Golden Eagle, Travelers and more…..feel free to call or email me for a quote at 877-257-1652 or mluckner@orrandassociates.com.

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