One of the most popular exclusions that insurance companies use to deny coverage for a consumer claim is the “business use” exclusion. Most personal auto policies exclude any loss or accident that occurs during business use. This exclusion is based on the fact that consumers who use a vehicle for business purposes are more likely to be in an accident than those who simply use the vehicle to commute to work. Insurance companies argue that they would have charged more premiums and the risk is higher than what was originally contemplated by the agent and/or insurance underwriter when the policy was sold.
If you have a family car, it is possible to drive to work in an eight-to-five or nine-to five job. After the family member leaves for lunch, the person would return to work and then, at the end, go home. You can use the weekend as usual.
Business vehicles are often on the road more frequently than family vehicles. Insurance companies often look at how frequently a family vehicle is driven and compare it with the average business vehicle. They believe that this increases their risk.
Consumers need to prove that the vehicle was being used for private purposes at the time of an accident. The insured may be able to show that the vehicle was used for private purposes at the time of the collision. A fact finder must decide whether the vehicle was driven for business or private purposes. The fact finder must consider many factors to determine whether there is business use.
This is a requirement that insurance companies must prove in order to deny coverage. Most consumers will be able to prove that they are employees and not engage in business use. This exclusion is more common if the insured is self employed or owns a sole proprietorship. This simple fact can cause problems when requesting coverage.
Self-employed consumers use their family car to do business errands. The facts that will constitute “use” have been disputed by courts. However, they have stated that a vehicle can be used for one purpose and then for another on the next trip. To determine the purpose of each trip, it is important to consider all facts and circumstances.
Courts have ruled that transporting a vehicle to an event for business purposes is possible if the business representative is present. Courts also ruled that the payment of salary, wages, or the “free” trip does not necessarily mean that the trip is business-related.
Adjusters are trained in the search for specific evidence to prove business use. They are trained to look for letters on vehicles. A vehicle with a logo or graphic on it could be considered evidence of business use. Self-employed parties with a sign advertising their company may find this problematic.
Talk to your agent if you own a business, or if you work for yourself, about how you use business insurance. Also, what you can do and what you cannot. You could be exempted from coverage if you don’t.
Hector Quiroga, a Spokane Lawyer, is interested in personal injury, contracts litigation and bankruptcy filings. Hector loves writing and learning about law, Colombia and Spokane. He also enjoys photography and the internet. His articles aim to assist consumers in protecting their rights and defending their interests. These articles are intended to assist consumers in making educated purchasing decisions and resolving disputes with sellers and retailers.
