Does My Business Need Commercial Auto Insurance?
You know that you’re required to carry personal auto insurance. That’s pretty straightforward when it comes to your personal vehicle. But what if you’re a business owner? Is your personal auto insurance enough? Or do you need to carry commercial auto insurance for your business?
Commercial vs Personal Auto Insurance
The first thing to do is to understand the difference between commercial and personal auto insurance. Personal auto insurance is pretty straightforward. It covers your personal vehicle. Commercial auto insurance is also pretty straightforward, at least at a glance. It covers vehicles that are used for business purposes. That includes vehicles used by either yourself or your employees. Keep in mind that it’s not the same thing as rideshare insurance, which is usually used by rideshare and delivery drivers. Fun fact: commercial auto insurance may be considered a tax-deductible business expense; personal auto insurance is not.
Who Needs It
Upon closer inspection, deciding whether or not you need commercial auto insurance for your business may not be quite as cut and dry. Cars that are used for occasional business use may be fine with just personal auto insurance. However, if the car is used regularly for work (commuting doesn’t count), it should be covered by a commercial auto insurance policy. This applies both to small business owners and those who are self-employed. If you drive for cash, transport items for work reasons, or put a lot of miles on the vehicle, you’ll probably need commercial auto insurance.
What It Covers
Coverage for commercial auto insurance is quite similar to personal auto insurance, at least in terms of what sorts of things are covered. A typical policy includes liability coverage, medical payments, uninsured motorist coverage, and comprehensive and collision coverage. Other things like towing and labor, rental reimbursement, and lease gap coverage may be included, but aren’t always. Business vehicles tend to need more protection than personal vehicles, so the coverage these policies offer tends to come with a higher liability limit.
It’s always best to know what sort of insurance you should carry, especially when it comes to your business. There are a few different factors that influence whether you need commercial auto insurance or not. Make sure you understand what sort of auto insurance is appropriate for you and your business so you know you’re covered.