Commercial Vehicle Insurance vs. Personal Insurance

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.

I have seen many of these companies grow. As they grow, they start using the same personal car to pick up inventory, haul equipment, and even pick up passengers. In addition, some business owners even allow employers to borrow the car for work.

If you are concerned about the use of your personal vehicle for business, it would be a good idea to inspect your own personal policy. You should also speak with a qualified insurance agent. It would be awful to lose your business because of poor business vehicle coverage.

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.

Do employees use the car, or do you expect them to use their own cars for work? You really should address your coverage if other people, not named in your policy, use your vehicle to perform your company business.

Of course, you think about damage to vehicles. Your car, and other cars, could be damaged in a wreck. But personal injury liability insurance may be a bigger issue. If you let others drive your car, or if you pick up passengers, you should be particularly concerned about commercial vehicle insurance.

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?

I is important to understand how adequate commercial vehicle coverage can protect you.

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