Running a small business involves lots of responsibilities and challenges. Owning and operating commercial vehicles for your company could be one of those. Getting comprehensive auto insurance is crucial if you want to protect your commercial vehicles while staying covered from at-fault accidents and related claims.
Business auto insurance is not the same as personal auto insurance. Therefore, when you sign up for your next commercial auto insurance policy, be aware of what to expect. Here is everything you need to know about business auto insurance.
Why Is a Commercial Auto Policy Required?
Commercial auto insurance is required to:
- Protect your business from liability claims arising from accidents that involve your commercial vehicles
- Cover your employees in the event of injuries (paying their medical expenses and providing compensations)
- Protect your customer’s property during accidents (reimbursing for damages and losses)
- Be compliant with the law (as most states mandate commercial auto insurance)
What Coverages Are Needed?
It depends on how you utilize vehicles in your business, who will be driving them, whether you own, rent, or lease them, and whether you or your staff will be driving their automobiles for work purposes. Business auto insurance’s maximum and minimum coverage limits are $1 million and $500,000, respectively. With a business auto policy in place, even a small business can cover the expensive damage in a catastrophic accident.
Reasons You Need Business Car Insurance
You’ll need business car insurance if you use your automobile for work, even if it’s just for commuting. Some of the most common reasons for obtaining commercial auto insurance are:
- Leasing vs. owning: A corporation or partnership that either owns or leases a car.
- Work-related high mileage: If you’re traveling tens of thousands of miles for work, including for ridesharing or delivery,
- Weight or load capacity of the vehicle: If your vehicle weighs more than 10,000 pounds or has a load capacity of more than 2,000 pounds,
- Travel to many areas regularly: If you frequently travel to a variety of areas, such as out of state or to several towns, job sites, or offices,
What Is the Cost of Business Car Insurance?
As business automobile insurance policies offer more extensive protection than personal car insurance policies, they are slightly expensive. Here are some factors that will affect the cost of your commercial auto insurance:
- Employee drivers’ driving records.
- Policy restraints
- The number of vehicles you use, as well as the type and value of each vehicle
- Your risk exposures
- Your claims history
Insuring your company’s vehicle has become one of the most straightforward and necessary ways to enjoy peace of mind as a business owner while saving thousands of dollars.