Is Purchasing a Commercial Auto Insurance Policy Actually Worth It?

As a business owner, you are aware of the different challenges you face on a daily basis. Commercial insurance helps you protect your investment. However, if a small part of your business involves transportation, is purchasing a commercial auto insurance policy worth the additional cost?

During the initial stages of your business, you may believe that your personal auto insurance covers you while you use a vehicle for business purposes. However, this is incorrect. If you are involved in an accident while conducting business or your vehicle is stolen, you are not covered unless you have commercial auto insurance.

Personal auto insurance is designed to cover your personal interests, not the needs of your business. Generally, personal auto policies cover you as well as your family members. On the other hand, commercial auto insurance coverage protects you and your employees. If you are operating a sole proprietorship, however, you have the option to insure your family members through the Named Individual Endorsement business policy.

Policy Costs 

The majority of personal auto insurance policies do not include a liability limit that is high enough to cover a business if an emergency arises. The maximum policy limit is normally around $500,000 worth of coverage. Commercial auto insurance policies generally provide more than double that amount in liability coverage. You want to make sure that you have enough liability coverage to continue operating if a huge claim is filed against your business. While researching coverage options, think about your insurer’s opinion on covering business risks. Make sure that you are completely aware of their stance before purchasing a policy. Most personal auto insurance companies will not endorse a policy registered to a business.

Why Commercial Auto Insurance Is Important 

Commercial auto insurance helps protect your assets by covering costs related to liability and property damage claims. If your business is involved in a serious legal dispute, you may be forced to cover the costs out of pocket if you don’t have insurance. Once the judgment has been ruled, you could lose all of your assets and be forced to shut down your business or start over. Commercial auto insurance gives you a foundation to lean on.

Differences Between Commercial Auto Insurance and Personal Auto Insurance 

Commercial auto insurance gives you the freedom to operate your vehicles for personal and professional use if you choose to. Traditional auto insurance generally prohibits the use of a personal vehicle for professional endeavors. Traditional auto insurance policies only provide coverage to vehicles bought before purchasing the policy. You will not be covered if you acquire any new vehicles during the duration of the policy. However, commercial auto insurance will cover any additional vehicles that you purchase during the policy period. If you rent a vehicle, the physical damage is covered only if you have coverage for the vehicles that you own. Commercial auto insurance policies cover your loss of use expenses and alternative transportation expenses if something goes wrong.

You also have the ability to customize your commercial auto insurance coverage through endorsements and symbols. Traditional auto insurance policies don’t provide that level of versatility. The symbols on your commercial vehicle notify everyone about the type of coverage that you have. Endorsements allow you to change the terms of your policy as and when needed. You can remove, add, or amend your coverage based on your individual needs. To find out, let’s take a closer look Learn more.

Commercial auto insurance is essential if you are involved in the transportation industry or part of your operations involves travel. Accidents can happen at any time while you are out on the road, so it’s important to make sure that you are protected in any scenario. If you have any questions regarding commercial insurance, contact our experts at Humble & Davenport Insurance. We will help you find the coverage you need to protect your business regardless of the situation. To get started, contact us today!

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