Commercial Auto Insurance

When your company requires a vehicle or many vehicles to do business, you will probably need commercial auto insurance.  Buses, cars, trucks, car carriers, cargo vans, cement mixers, delivery vans, dump trucks, flatbeds, garbage trucks, limousines, passenger vans, refrigerated trucks, sport utility vehicles, tank trucks, tow trucks, trailers…  these are just some of the types of autos used to facilitate business.

There are cases in which a personal insurance policy may be sufficient.  Some carriers allow you to add a business endorsement to a personal policy.  An insurance carrier will establish a definition of commercial use.  Understanding this definition is imperative, and discussing it with your insurance professional will clarify if a commercial insurance policy is needed or not.  If in doubt, it is better to obtain a commercial policy.

The following are some guidelines in determining if you need commercial auto insurance.
You need commercial auto insurance if…

A vehicle is used to deliver goods and/or people.

You or your business owns or leases one or more vehicles and your employees drive them for work purposes.

You require higher coverage limits than your personal policy allows.

You run a business as a sole proprietorship, a corporation, partnership, LLC, etc.

Multiple vehicles are used for artisan use.  Artisan use is typically identified as work in specialty fields such as interior decorator, electrical contractor, handyman, carpenter, painter, surveyor, landscaper, etc.

Work equipment is permanently attached to the vehicle.

There are more factors to consider before deciding whether a commercial insurance policy is necessary.  Also, each carrier will have its own set of rules which could vary per carrier.

Some factors may lower your commercial auto insurance premium…

Location of vehicles determines premium charges regarding theft.

Hiring qualified drivers with safe driving records.

“Five Star” safety rated, domestic, mid-sized sedans will conduct the lowest premiums.

A high deductible, which implies that the company is willing to afford a greater part of the risk in case of a claim, will lower premiums.

Safety and anti-theft devices will lower premiums.  These include seat belts, air bags, alarms, and GPS tracking systems.
Federal and State Regulatory Standards…

Businesses with vehicles that cross state lines in the course of business may be subject to Department of Transportation requirements for insurance that must be met.  These regulations apply to both owned and non-owned vehicles. Regulations addressing rented or leased cars, trucks, equipment and trailers may require hired or non-owned vehicle coverage.