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Commercial Insurance

When Does a Business Need Commercial Car Insurance?

A business needs commercial car insurance if it uses vehicles in the operation of the business. This includes any type of motor vehicle, not just a car. In addition to cars, this includes vans and trucks. It doesn’t matter if the vehicle is leased or owned, or if you own one car or an entire fleet – you must have commercial auto insurance. State laws require all drivers to have insurance, and a business is not exempt.

Vehicles must also have this insurance if they are fitted with snowplowing equipment, cooking or catering equipment, hydraulic lift equipment or bathrooms.

Commercial insurance is similar to regular auto insurance. You must at least have liability coverage, but a higher amount is recommended. There are also add-ons (called riders) that are specific to certain businesses. Riders can cover employees, equipment, loading and unloading of that equipment, and even business assets. You should also obtain comprehensive and collision coverage, personal injury protection, and underinsured / uninsured motorists coverage.

Coverage usually fits into one of three types: all the automobiles owned by the business,
all the automobiles owned by, hired or leased by the business, or all the automobiles used by the business even if they do not own, hire or lease them.

If your vehicle is only used occasionally for business purposes, then you may qualify for sporadic business use insurance. In this case, the vehicle cannot be primarily for business use. Also, if you drive a commercially insured vehicle for non-business use, then you will not be covered in the event of an accident.

Your state has requirements for the amount and type of insurance you need. Usually, liability coverage is the least amount of coverage you can get. Speak with an insurance agent to learn more about business insurance coverage.






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