Insuring Your Business Vehicle

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You need to take into account many factors when you insure a vehicle that your business owns and uses. These questions and the answers to them will help you decide what insurance you need in order to protect your business, employees, and yourself. You don’t want the cheapest insurance. Every time a business vehicle moves, your business is at risk.

Business owners need to have the same insurance coverages in place for cars, trucks and vans that they use for work as for personal vehicles. Your Business Owner’s Policy does not typically cover liability for vehicles that are used within your business. You will most likely need separate vehicle insurance.

Liability insurance is required in most states. It covers bodily injury or property damage that could result from an accident while you, or someone working for you, are driving for work. The Business Auto Coverage Form is the most popular contract to provide auto liability insurance for business. The form does not refer to autos but includes trucks, cars, trailers and other vehicles that can be used on public roads.

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Many states also require you to have uninsured/underinsured motorist’s coverage and/or medical payments coverage, known as Personal Injury Protection (PIP) in some states. You can also buy physical damage coverage for vehicles owned, leased or hired by your business.

You can list each vehicle that you use for your business separately on your policy. You can select different coverages depending on the vehicle’s characteristics and what you need.

What do I need to have a business auto policy?

Your agent will ask you about how vehicles are used in your company. This includes who is driving them, what type of vehicle they are, and whether you rent, lease or own them. Also, your employees and you will likely be driving your own cars. These questions will determine what type of coverage you need.

A BACF is the only way to provide sufficient liability protection, with a minimum of $500,000 recommended. This will cover any potential damages in an accident.

Can my Personal Auto Policy cover Business Use?

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Your personal auto policy might provide some coverage for business use of your vehicle. Your employees may also be covered by their auto policies if they use their vehicles for business purposes.

Your personal auto policy may not cover losses if the vehicle is being used for business purposes. Your policy will not provide coverage for vehicles that are registered and titled to businesses. It is essential to have adequate liability coverage in case of an accident that results in serious injury to your business, whether you or your employees are driving personal vehicles.

Many business people have a personal insurance policy to cover any claims for personal injuries. An umbrella policy will typically exclude all claims that are not related to the business.

What Vehicles are Covered by a Business Auto Policy

Depending on what coverage your insurance company offers, the options for business auto policies may vary. The BAP can be limited to a specific vehicle or extended to cover all of the insured’s automobile use. The majority of states provide three options to determine which vehicles are covered by your policy.

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1. All vehicles owned by your company
2. All autos owned, leased, or hired by your company
3. All automobiles used by the business, even those not owned, hired, or leased.

The third option is recommended by most businesses as it protects employees and owners who use personal vehicles for business purposes.

Information about the Business Auto Coverage Formulas

Ensure that the owner of the title is named as the principal insurable on your insurance contract.
Ensure you have collision and comprehensive coverage.
A small business should have auto coverage limits of at least $1,000,000. This coverage is usually not very expensive and can save your business money in the event that a business car is involved in a serious auto accident.
-The minimum combined single limit (CSL), for your business policy, should be $1,000,000
A business umbrella policy can be a great idea. Ask your agent for information about the options available to you regarding your policy. These policies provide additional protection, provided they are still in force at minimums.

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Your business vehicle can also be your personal vehicle

If an owner or employee of a company drives a business vehicle for personal purposes and they do not own their personal vehicle, the coverage gap is there. In these cases, the BACF does NOT cover personal use of the vehicle. To add “Drive Other Car Coverage Endorsement to a BACF Policy”, an owner would have to do so. This will provide coverage for other vehicles owned by the owner of the business, making it more personal and covering both the driver and the vehicles covered under the business policy.

If you permit a bad driver on the road, your business may be liable