If part of your business operations includes driving vehicles, you might have wondered about commercial auto insurance. If you haven’t already thought about it, well, you should now. Sure, you have personal auto insurance, but will that policy cover a business-related liability? More often that not, it won’t.
It doesn’t matter what type of business you have – sole proprietorship, partnership, or corporation – if you use a vehicle as part of your operations, you should at least explore the possibility of insuring your business vehicle.
Decisions to Make
Before you start calling insurance carriers, you should first make some decisions about how your business vehicles are going to be used.
The primary questions you’ll be asked by insurance carriers are:
• How many vehicles do you have in your fleet?
• What will the vehicles be used for?
• How many drivers will you have and who are they?
Answering these questions will help you and potential carriers determine if you truly need commercial auto insurance. If you already have auto insurance on your personal vehicles, you might ask your carrier if this policy will suffice.
If it turns out you indeed need business auto insurance for your fleet, even if it’s just one car, you should shop around among various carriers to choose the best insurance policy for your business.
Choosing Business Auto Insurance
As you think about the coverage you might need, there are several choices you’ll have to make.
• Which carrier will you choose? There are a lot of companies that offer commercial auto insurance for your business vehicles. Choosing among them might be difficult. As you shop around, here are some questions you might want to ask each provider. How are claims handled? During what hours of the day can you make a claim? What are the options in coverage choices? Are the liability limits enough to protect your business? What are the policy limits?
As you get the answers to these questions, you’ll be better able to decide on a carrier. If you narrow it down to two or three carriers, you can coverage and price to make a final decision.
• What coverage do you need? This will partly depend on the state in which you operate your business. Many states have minimum coverage requirements that may very well meet your needs. Of course, if you need coverage beyond the state-required minimum, make sure the carrier you choose can provide the coverage you’ll need.
At a minimum, you should have coverage for the following: damages and injuries that you or your drivers cause to others, your own damages and injuries, damages and injuries caused by uninsured motorists. You’ll also need coverage for theft or other kind damage done to your business vehicles.
• What is the price of the policy? Like personal insurance, the price of insuring your business vehicles will depend partly on your driving record and that of the employees you list on the policy. If driving is a major part of your business operations, you might consider hiring only drivers with good motor vehicle reports. Otherwise, your business insurance rates will increase because of their past driving mistakes.
Your credit history, or that of your business, will also be used to price your policy. A limited or bad credit history might lead to a higher premium than you might otherwise pay. Always ask about any discounts that you may qualify for. These can lower your premium by at least a few percent.
Make your final decision by considering all these factors together. Avoid focusing solely on price. A cheap carrier that takes a long time to process your claim might not be worth the savings.