Commercial auto insurance is one of the most important aspects of your business insurance program. If your business uses a vehicle, or many vehicles, you need commercial auto insurance and you will want to ask your business insurance professional some important questions. You will also want to provide your business insurance professional with a complete picture of your vehicle use.
Consider the following points and ask the following questions.
How Many Vehicles and Drivers Will the Business Insure?
Commercial auto insurers often separate coverage types based on the number of vehicles and drivers to be insured. Fleet insurance is an option for businesses that will have a number of vehicles and drivers. The number of vehicles differs with each insurer and may depend on the class of vehicle. But, fleet insurance may be a less expensive alternative than individual, per vehicle policies.
What is the Policy Definition of Commercial Use?
Your personal auto policy will exclude coverage for commercial uses of your vehicle. A commercial policy will establish a definition of commercial use as well. It is important that you read the definition and discuss this with your insurance professional. If there is any question, it is better to obtain a commercial auto policy so that, in case of an accident, there is no chance of being uninsured.
How Can You Lower Premium Costs?
Commercial auto business insurance premiums can be lowered by:
- Business Location - the location of the vehicles determines premiums for theft.
- Driver Records - hire only qualified drivers with safe driving records.
- Choice of Vehicle - sales people may want sports cars, but five-star safety rated, domestic, mid-sized sedans have the lowest premiums.
- Deductibles - can your business afford part of the risk and maintain a high deductible? If so, your premiums will be lower.
- Safety and Anti-Theft Devices - alarms, GPS tracking, air bags, seat belts, and other such devices can significantly lower premiums.
Special Commercial Coverages and Considerations.
Certain businesses must adhere to federal and state regulatory standards in the operations of their vehicles. For example, if your business will be hauling cargo interstate, there are specific Department of Transportation requirements for insurance that must be met. You will need to make sure you and your insurance professional have a thorough understanding of those requirements. Also, if you will be delivering or hauling for others or using other's equipment such as leased trailers or rental equipment, you will need hired or non-owned vehicle coverage.
Who is the Insured?
Make sure you know the insured. Sound simple? Maybe. But, all to often businesses set up a leasing company to lease equipment to the main company and the leasing company is the titled owner of the vehicles. A common mistake is to identify the main company and not the leasing company as the titled owner on the policy. Or, the dba of the company and not the full name of the company is listed. You want the full name of the company as an insured, the titled owner, any affiliates, and dba, and all employees as insureds on your commercial auto policy.