Does Your Small Business Need Commercial Auto Insurance?

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If your small business uses a vehicle for business-related purposes, you may need commercial auto insurance. Learn more about how it can serve your company.

As a small business owner, you may wonder whether a vehicle you use for work needs commercial auto insurance. This type of insurance protects businesses from financial loss when a commercial vehicle is in an accident. Having the right insurance is paramount for small business owners to protect their assets. This is our guide to determine if your small business needs commercial auto insurance.

What Is Commercial Auto Insurance?

Commercial auto insurance policies cover vehicles used for business-related purposes. These can include delivery trucks, vans, and taxis, but not rental vehicles. Vehicles owned by a company and vehicles that perform business services may qualify for commercial auto insurance.

Small business owners should know that personal auto insurance policies do not pay damages to drivers in work-related car accidents. This could cause a major mishap without proper protection.

Benefits of Commercial Auto Insurance

Most states require businesses to provide minimum commercial auto insurance for their fleet of vehicles. Small businesses also need this coverage to protect them from damages and can highly benefit from having commercial auto insurance in case of an accident. Here are the top benefits of commercial auto insurance policies for small business owners:

  • A commercial auto policy provides specialized coverage tailored to your business and industry needs.
  • It protects your small business from a financial crisis if a car accident were to happen.
  • Commercial auto policies have higher liability limits than personal auto policies.

Examples of Business Uses for Vehicles

There are many ways a vehicle can serve your small business. In the following examples, your small business would need a commercial auto insurance policy:

  • Your business owns a fleet of cars, vans, or buses.
  • An employee drives your vehicle for business purposes.
  • You use your vehicle to haul tools and equipment or tow a trailer.
  • Your business uses a vehicle to transport goods or people as a service.
  • The vehicle makes business deliveries.
  • Your personal vehicle completes business tasks.

A business-related use is a general term with multiple meanings. It can be as simple as driving to meet clients, picking up supplies, or traveling long distances to job sites.

What Commercial Auto Insurance Covers

If a vehicle used for your small business were to get into an accident, commercial auto insurance can cover a few different types of expenses. The coverage is more comprehensive than a personal insurance policy because businesses can lose valuable assets, including employees, which decreases productivity.

A commercial insurance policy will include liability protection if an employee is at fault, as well as collision and comprehensive insurance. Depending on your small business’s needs, you may also opt for medical coverage and property damage coverage.

There are many reasons to get commercial auto insurance as a small business owner. It’s important to shop around for policies to make sure your business has the protection it needs at an affordable price.

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