Does Your Business Need Auto Insurance?

For businesses of all sizes, certain types of insurance coverage are standard, if not required, by law. While commercial auto insurance isn’t one of these, there are several times in which a company, or even a single-individual enterprise, might want to have this type of coverage.
To start, a commercial auto policy differs from your standard personal car coverage by degree and purpose, particularly where liability is concerned. Additionally, a personal policy almost always excludes business uses. Generally, if you’re using a vehicle on the job for a purpose other than commuting, the coverage you have isn’t sufficient, and should be supplemented with a commercial policy.
How do you know if you need a commercial policy? Consider these basic factors.
Usage
Beyond driving to and from work, a car – be it a company owned or personal car – falls within the commercial realm if it’s used in one or more of the following ways:

• Making deliveries
• For a taxi or limousine service
• If a pickup, van or truck exceeds 10,000 lbs. and has a rated load capacity over 2,000 lbs.
• If you use it for snowplowing equipment, cooking or catering equipment, bathrooms, altered suspensions, hydraulic lifts, racing equipment, ladder racks or permanent toolboxes
• If it conducts any kind of service
• Carrying hazardous or flammable materials
• Carrying housekeeping equipment
• Newspaper delivery

However, there are a handful of exceptions:

• If you’re a door-to-door sales person, for instance selling Avon or Mary Kay cosmetics
• If you’re a real estate agent, lawyer or someone who travels to clients on a regular basis
• If you’re a home healthcare or social worker

Registration
Whose name is the vehicle registered under? There are two instances in which you may need commercial coverage:

• If the vehicle is registered under the company name and has commercial auto tags
• If the vehicle is registered under your name, but is used for any of the commercial purposes listed above

Who Drives
It’s never recommended to take out a personal auto policy, only to have your employees drive the vehicle for business purposes. Instead, to make sure you’re covered in the event of an accident with the company car, take out a commercial policy, then list all employees who will be using it. Doing so allows the insurance company to properly underwrite your policy with all possible risks.
Looking to supplement your business insurance with a commercial auto policy? Have Ion Insurance explain your options. To learn more, give us a call today at 203.439.2815.