Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Jan 17, 2018

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Key takeaways...

  • Private car insurance may pay for some business uses, but it will not cover a vehicle that is used primarily for a business
  • Commercial car and van insurance is necessary to protect you and your business from loss, lawsuits, and financial ruin
  • The only insurance coverage that truly protects your business and its vehicles is commercial auto insurance

You have built your company out of nothing more than a dream and hard work, and now it is time to protect that dream with insurance coverage.

Commercial car and van insurance is necessary to protect you and your business from loss, lawsuits, and financial ruin!

You buy private car insurance to protect your vehicle, home insurance to protect your house and belongings, and liability insurance to protect your business, so it is high time that you buy commercial car and van insurance to protect the vehicles used in your business.

Car insurance companies are ready and waiting to provide you with a quote for coverage! Enter your zip code above to get started for FREE!

Table of Contents

Other Insurance Doesn’t Cover Your Business Vehicles

Many business owners have some false beliefs when it comes to car insurance coverage for their commercial vehicles, and such inaccurate information can really cost your business big time.

Basically, commercial car insurance is the only option that fully protects your business from auto liability costs, repair costs, and medical bills.

First, many businesses believe that their private car insurance will offer protection for business use of the car, truck, or van. That is not entirely so, according to the experts at the Insurance Information Institute.

Private car insurance may pay for some business uses, but it will not cover a vehicle that is used primarily for a business.

Additionally, you might not even have enough coverage through your private insurer to cover damages if a company vehicle causes an accident.

Furthermore, if you lied about the primary use of a business vehicle on your car insurance application, and your insurance provider finds out when you try to file a claim, then your provider can drop you for fraud.

You will then be responsible for the full amount of your claim.

Second, many business owners erroneously believe that their business owner’s policy will cover the vehicles used in their business.

Again, this isn’t unless you expressly specify to your business insurance provider that you also need commercial auto insurance coverage.

Lastly, another misconception held by home-based business owners is that their homeowner’s insurance policy will cover their business use of their vehicle.

The National Federation of Independent Business informs that a homeowner’s policy will only cover $2,500 in damages or loss of business property at your home and only $250 away from home.

The only insurance coverage that truly protects your business and its vehicles is commercial auto insurance.

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Protect Your Business

The first reason you should buy commercial auto insurance for your business’s cars and vans is to protect your business. Since you really aren’t covered by private car insurance when you use your vehicle for work purposes, it is almost like driving around without insurance.

If you get into an accident while driving for business purposes, your business can be held responsible for damages and injuries caused to others.

Your business can also be sued for additional damages, negligence, or pain and suffering. Even if a lawsuit against your company is proven to be groundless, you will still have to spend time and energy defending your business.

You will likely need to hire a lawyer, and no one will reimburse you for such an expense unless you have commercial car insurance that covers liability.

The only way to fully protect the liability of your business concerning the use of vehicles is to purchase commercial auto insurance coverage. Your business’s premiums for car insurance coverage will be much lower than an accident that is not covered by any insurance or a lawsuit.

Essentially, commercial car insurance gives you peace of mind that your business is protected.

Protect Yourself

If your business is not incorporated, then you can also be sued if your company’s vehicle or your private vehicle on company business was the cause of an accident.

Incorporating a company essentially takes the liability off of the owner and shifts it to the business.

If you have not taken this protective step, then you can be held liable for damages caused by vehicles working for your business.

This also extends to employees driving your company’s car or your private vehicle for business purposes.

You can also be sued if an employee causes an accident under many states’ laws.

Again, just because you are sued doesn’t mean that you will be ruled against, but it will still be a costly and time-consuming affair. How much will a lawyer and your precious time cost your company?

The best option is to invest some money now in protecting yourself and your company by buying commercial car insurance coverage. That way you will have the peace of mind to know that you and your company are protected from liability costs and lawsuits.

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Protect Your Vehicles

Lastly, commercial car insurance can protect the assets of your private or company cars. Liability coverage provides payments for damages and injuries done to another driver, but what about your vehicles?

Not all accidents occur with other drivers. You can have a vehicle damaged by a one-car accident, vandalism, a storm, fire, and flooding, and you can suffer loss of the vehicle through theft.

Can your company afford to fix damages to your commercial or private vehicles if they are involved in a crash, a theft, or other loss? Can your company operate without these vehicles?

What will happen to your company’s revenue if your company’s vehicles are inoperable for even just a small amount of time?

You might even be required to have commercial auto insurance if your vehicles are leased or if you are still paying on a loan. If you owe on your company’s vehicles, and the vehicle is damaged or stolen, your lender will still expect you to pay off the loan.

If you can only see failure and ruin from the loss of a company vehicle, even if for just a short amount of time, then you need to have commercial car insurance coverage.

Collision and comprehensive protect your commercial vehicles from damages, theft, and other losses such as fire or wind damage, just like personal auto protection does.

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Where to Find Commercial Car Insurance

It is not hard to find commercial auto insurance, even though it is not advertised as much as private car insurance. Actually, most large providers of private auto insurance also offer commercial car insurance.

Check with the provider of your personal car insurance to see if it offers coverage for business vehicles as well.

Furthermore, you can probably also get commercial car insurance coverage through the company that supplies your business owner’s insurance.

Many insurance companies will include all three, and perhaps even homeowner’s and renter’s insurance. You can realize significant savings by bundling all of your insurance needs with one provider.

Additionally, some commercial auto insurance providers specialize in providing coverage to certain types of businesses. Businesses that operate a tractor-trailer fleet are one example of a business that might benefit from specialty insurance.

The U.S. Small Business Administration recommends finding a licensed, independent insurance agent to assist you in finding the right coverage for your business.

An agent can also help you to assess your business’s risks, as not all companies will have the same amount of risk or need the same amount of coverage.

Shop around

Shopping around and comparing prices from several different car insurance providers is essential to finding the best price for any insurance.

Prices for the same amount of coverage vary widely from one provider to another. Getting quotes from many different providers can help your business to get all of the commercial car coverage that is needed at the best price possible.

Make sure you specify the same amounts of coverage with each company that you query so that each quote can be compared to another.

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References:

  1. http://www.nfib.com/business-resources/business-resources-item?cmsid=50104
  2. https://www.thehartford.com/commercial-auto-insurance
  3. https://www.geico.com/information/aboutinsurance/commercial/
  4. https://www.nationwide.com/what-is-general-liability-insurance.jsp
  5. https://www.esurance.com/info/car/comprehensive-and-collision-coverage
  6. https://www.21st.com/
  7. http://www.sba.gov/content/buying-insurance