The need to purchase commercial auto insurance is quite clear for businesses that have vehicles that are solely used for business purposes or who maintain a large fleet of vehicles. However, the need to purchase this type of insurance can be far less obvious for many small business owners who rely on their personal vehicles for both personal and business-related matters. If you are not quite sure whether or not your small business requires commercial auto insurance, taking the time to answer the three basic questions below can help you to make this determination.
Do You Ever Use Your Vehicle To Make Deliveries Or Transport Inventory Or Equipment?
If you answered yes to this question, you will need to purchase commercial auto insurance. This is because traditional auto insurance does not cover damage to your vehicle or its contents when the vehicle is being used for business purposes. This means that if any of the items you are transporting were to be damaged or stolen, the repair or replacement of these items would not be covered by your personal insurance even though they were located inside of your personal vehicle at the time the loss occurred. You will also find that your personal insurance will typically exclude coverage for any personal injuries that are suffered as the result of an accident if you are behind the wheel for business rather than personal purposes.
Do You Ever Allow Employees To Drive Your Vehicle For Business Purposes?
This particular question can get a bit tricky because many of the tasks that small business employees perform using the boss's car may not seem directly business-related. For instance, if you allow your employee to use your personal vehicle to go pick up lunch, you may not consider this to be a business-related errand. However, if the employee is picking up lunch for more than just themselves, this task can be considered business-related and will therefore require the vehicle to be covered by commercial auto insurance.
Is Your Vehicle Used To Get Back And Forth To Work Sites?
This is another question that often catches small business owners off-guard. This is because many of these individuals regard traveling back and forth to a worksite as being the equivalent of driving to and from the office each day and therefore do not believe it is business-related travel. However, if you are traveling anywhere other than the primary physical location of your business for the purposes of completing your job duties, this is considered business-related travel and will require the vehicle to be covered by commercial auto insurance.