When insuring a vehicle your company owns, there are many things to be aware of. These questions and their answers will help you decide what insurance you need 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.
As a business owner, you need the same insurance coverage as you would for your vehicles, such as cars, trucks, vans, etc. Your Business Owner’s Policy does not typically cover liability for your cars. This means that you will need a separate policy for automobiles.
Many states require that you purchase liability insurance to cover bodily injury and damage that could result from an accident while you or someone in your company is driving for business. The Business Auto Coverage Form is the most common contract to provide business auto liability insurance. The form does not refer to autos but includes trucks, cars, trailers, and other vehicles that can be used on public roads.
Many states also require you to have uninsured/underinsured motorist coverage and medical payments coverage, known as Personal Injury Protection (PIP) in some states. You can purchase physical damage coverage for vehicles your company owns, leases, or hires.
You can list each vehicle 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 drives them, whether they are yours, your rent, or your lease. It will also ask if your employees will likely go in their cars. These questions will help you determine the type of coverage that 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.
What does my auto policy cover for business use?
Your auto policy might provide some coverage for business use of your vehicle. Auto policies may also cover your employees if they use their cars for business purposes.
Your auto policy may not cover losses if the vehicle is used for business purposes. It will likely not cover any vehicle titled or registered to a company. 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 businesspeople have an umbrella policy that covers personal damages. An umbrella policy will typically exclude all claims unrelated to the business.
What Vehicles are covered by a Business Auto Policy
Depending on your insurance company’s coverage, the options for business auto policies may vary. You could have the BAP apply to only one car or extend it to include all automobiles. There are three vehicle options available to you in most states that your policy could cover.
1. All vehicles owned by your company
2. All autos owned, leased, or hired by your company
3. All automobiles the business uses, even those not owned, hired, or leased.
Most businesses recommend the third option 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 that you have comprehensive collision coverage for your vehicles.
A small business should have auto coverage limits of at least $1,000,000. It is not expensive and could save your
company from a serious accident involving a business vehicle.
-The minimum combined single limit (CSL) for your business policy should be $1,000,000
A business umbrella policy is 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 a minimum.