Being a small business owner can sometimes feel like doing nothing more than an endless series of routine administrative tasks. This bureaucratic nightmare is never more evident than when you are starting a new business. In addition to filing all of the paperwork required of any new business, you must also determine your major liabilities and purchase insurance to cover them. If you don't run a delivery business, then you may feel as though commercial insurance for your vehicle is unnecessary. If you use your vehicle as a part of your business, however, then this may not be the case.
Check for Exclusions
If your personal vehicle is the only vehicle that will be used for business purposes, then your first step should be to check your current auto insurance policy carefully. Most insurance policies do not have blanket exclusions for business use, so your regular policy may be sufficient. If you cannot find an exclusions section in your plan, then contact your insurance carrier to confirm whether your type of business will be covered. It can be worthwhile to shop around for other personal insurance policies as well since not all insurance companies have the same exclusions.
Fleet Insurance
If you are operating more than one vehicle or if your employees will be using your car (or fleet vehicles) as part of your business, then you will need commercial insurance. Note that although this type of commercial insurance is often referred to as fleet insurance, the coverage types and limits are similar to regular personal auto insurance. Commercial liability insurance protects you and your business by covering damage caused to property owned by others and against liability for injuries. As with standard coverage, comprehensive and collision options are usually available.
Edge Cases
What if you have no employees and operate only a single vehicle for your business? Depending on the type of business that you run, your personal coverage may be enough (subject to exclusions). There are a variety of edge cases that are important to understand, however. Passenger and delivery services of any kind are almost always excluded, and this includes working as a freelancer for ride-sharing services. Likewise, personal policies will generally exclude vehicles that are used to transport large amounts of tools to job sites or vehicles with specialty work equipment installed. Employees that ride as passengers in your vehicles may also not be covered by your personal medical liability coverage.
Since commercial automotive insurance can be complicated, your best option when starting a new business is to speak with an insurance representative. A professional can help to guide you in the right direction so that you can fully understand your options. Going without the proper insurance can expose you and your business to significant liability, so it is crucial that you know what type of liability coverage is required. Reach out to an agent to learn more about different kinds of business insurance.
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