As a business owner, you need the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel — liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists. In fact, many business people use the same vehicle for both business and pleasure.
If the vehicle is owned by the business, make sure the name of the business appears on the policy as the “principal insured” rather than your name. This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.
Whether you need to buy a business auto insurance policy will depend on the kind of driving you do. A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business.
While the major coverages are the same, a business auto policy differs from a personal auto policy in many technical respects. Ask your insurance agent to explain all the differences and options.
A commercial auto insurance policy provides coverage for vehicles used for business purposes. This type of insurance is distinct from personal auto insurance, as it addresses the unique risks associated with commercial vehicle use. A typical commercial auto insurance policy includes several key components:
Liability Coverage: This is the core component of commercial auto insurance and covers bodily injury and property damage liability. It pays for damages and medical expenses if you or your employees are at fault in an accident while using a business-owned vehicle.
Collision Coverage: Collision coverage pays for repairs or replacement of your business-owned vehicle if it is damaged in a collision, regardless of fault. It helps cover the cost of repairing the vehicle after an accident.
Comprehensive Coverage: Comprehensive coverage protects against non-collision-related damage to your vehicle. This includes damage from theft, vandalism, natural disasters, falling objects, and other non-collision events.
Uninsured/Underinsured Motorist Coverage: This coverage protects you and your employees if you are involved in an accident with an uninsured or underinsured driver. It covers medical expenses and property damage when the at-fault party lacks sufficient insurance.
Medical Payments Coverage: Also known as MedPay, this coverage pays for medical expenses for you, your employees, and passengers in your vehicle, regardless of fault, if they are injured in an accident.
Personal Injury Protection (PIP): PIP coverage provides broader medical coverage, including medical expenses, lost wages, and other related costs for injuries sustained in an accident, regardless of fault.
Hired and Non-Owned Auto Coverage: If your business rents or employees use personal vehicles for work purposes, this coverage extends liability protection to those vehicles. It is important for businesses that do not own a fleet of vehicles.
Cargo Coverage: If your business involves the transportation of goods or cargo, cargo coverage insures the items being transported against damage or theft.
Towing and Labor Costs: This coverage reimburses you for towing expenses and emergency roadside assistance in case your vehicle breaks down.
Rental Reimbursement: If one of your business-owned vehicles is temporarily out of service due to an accident, rental reimbursement coverage helps pay for the cost of renting a replacement vehicle.
Custom Equipment Coverage: If your vehicles are equipped with custom modifications or specialized equipment for your business, this coverage can protect those enhancements.
Non-Owned Trailer Coverage: If your business uses trailers that are not owned by your company, this coverage provides liability protection for those trailers while in use.
The specific coverage and limits in a commercial auto insurance policy can vary depending on your business needs, industry and the insurance provider. It’s important to work with an experienced insurance agent or broker who can tailor a policy to match your business’s unique circumstances and vehicle usage. Properly insuring your commercial vehicles is essential to protect your business from financial losses resulting from accidents, injuries, or damage to your vehicles or the property of others.
Copyright © 2024 Texas Insurance Agency – All Rights Reserved.