Many small business owners, particularly home based business owners, use their personal auto insurance policy to cover vehicles that are used for company work. In some cases it was ok when the companies were sole proprietorships, and the business owner was the only one to drive the car to an occasional meeting or client interview. Even as the businesses grew, the owner could add a business endorsement to a personal policy, which would provide adequate coverage.
But as some of these businesses grew, purchased inventory and equipment, and even hired employees, they may have outgrown a personal policy.
But let us consider the first issue. Have you told your insurer you use your car for business? If not, you could be taking a big risk as your personal policy may not have coverage limits that are adequate, or you may actually be violating your policy.
Mileage limits could be too low. If you covered your car when you just use to use it to shop for groceries or ferry kids to soccer games you may be exceeding the mileage estimates you declared when you filled out your initial application.
If you let your workers take the car on errands, or if you expect them to use their own personal vehicles, it is a good time to consider commercial vehicle insurance.
And while you should consider vehicle damage, both to yours and other people’s cars, you also need to be concerned about medical liability. If you, your employee, or another person, is injured, damages can really start to add up fast. Does your business pick up passengers? Personal injury suits are common these days, and you do not want to lose your company over one.
Do you make deliveries or pick up inventory? Your business inventory could be ruined in an accident, and your personal policy may not be adequate. If your products are damaged in an accident or lost in a theft, how much would your company suffer if you had to pay to replace it? Does your business rely on equipment that you transport from one location to another? Again, this equipment could be destroyed or stolen while it is in your car, truck, or van. How can you replace it if you do not have proper insurance?
Be aware that the lack of proper business vehicle coverage can put your own business at risk.
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Tags: Insurer, Personal Auto Insurance, commercial car insurance, small business
