With Commercial Auto Insurance, It Is Better to be Safe than Sorry

When is comes to commercial auto insurance, it is better to be safe (and pay more up front) than sorry. What do we mean? If you will start a business or have a company up and running, who owns the vehicles that you are using in the company? You the private individual or the company? If the vehicles are titled under the company name, make sure that the insurance policy is under the company name as well. If they are titled through you, make sure the insurance policy is written through you.

There is sometimes a tendency on the part of small business owners to blur the lines between business expenses and personal expenses to cut costs wherever possible. For example, personal auto insurance policies are generally less expensive than commercial auto policies. Therefore, a small business person might be tempted to have the company own the vehicles while he or she takes out an insurance policy through their name. The trouble with this is that you could open yourself to massive liability if there were a serious accident.

Further, if you have let’s say a consulting company where you use your vehicle to get to and from appointments, make sure that your insurance company knows this. Bite the bullet and tell them that you will be using the car in business for approximately 10,000 miles a year...or whatever the mileage is. It will not cost much extra and keeps everything legal and on the up and up.

What Insurance to Take Out

Depending on your business, consider the following coverages. Some are optional, some are mandatory:

  • Auto liability
  • Medical payments
  • Comprehensive coverage
  • Collision coverage
  • Uninsured and underinsured motorists coverage
  • Coverage for autos you borrow or rent
  • Coverage for employees using their cars for the business

Depending on your business, you many need far more coverage. Spell out for your insurance agent everything you do in your business. If you have an independent insurance agent well versed in your business, he will probably know more about the business than you do.

Naturally, as you know from insuring your personal vehicle, each state has its own set of insurance rules and regulations. That is, California commercial auto insurance rules are different from Florida commercial auto insurance rules. Go to your state’s website, to the insurance page, to find out more about your state and what is required for a commercial auto policy.

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