Many professional and specialty service owners rely on vehicles serve their clients. The Auto Insurance needs of some providers (truck drivers, for example) are obvious. But other service providers, including forestry consultants, interior decorators, and painters have less recognizable auto liabilities.
If you never drive a vehicle for work, it's worth familiarizing yourself with Commercial Auto Insurance and Hired & Non-Owned Auto Insurance to see if either policy fits in with your small business insurance plan.
Driving is probably one of your riskiest business activities. In the United States alone, more than 30,000 traffic crashes happen each and every day. Those who drive for work are at an even higher risk for traffic accidents.
Work-related traffic crashes cost employers billions every year – $20.5 billion, according to the National Safety Council's 2011 Injury Facts report.
About $4.1 billion of those costs come from vehicle damage and medical expenses – two costs that both Commercial Auto Insurance and Hired & Non-Owned Auto Insurance can cover.
Do Professional & Specialty Service Providers Need Commercial Auto Insurance or Hired & Non-Owned Auto Insurance?
Not all professional and specialty service providers need Commercial Auto Insurance or Hired & Non-Owned Auto Insurance. But it's always a good idea to consult with your insurance agent. Personal Auto Insurance policies cannot always provide adequate coverage. Read on to learn more.
Professional & Specialty Services: Commercial Auto Insurance vs. Your Personal Auto Insurance Policy
Commercial Auto Insurance is for professional and specialty service businesses that own vehicles. In other words, the vehicle's title is either in your name or the name of your business.
If the vehicle is in your business's name, there's no question that you need a Commercial Auto Insurance policy. It works just like a Personal Auto Insurance policy, but it offers more protection, since business driving produces greater risks.
Other service providers may use their personal vehicles for business purposes. In some cases, your Personal Auto Insurance policy may provide enough coverage, but this isn't always the case.
Most Personal Auto policies include exclusions for “business use.” Because of this (and depending on the specifics of your policy and your vehicle usage), you may be in need of a Commercial Auto Insurance policy. Here's what to keep in mind:
- Exceptions. Even though most Personal Auto policies exclude coverage for business use, they do make some exceptions. Sometimes your policy will say it still covers passenger autos, pickups, vans, and trailers – even if you use them for business purposes, as long as your vehicle and usage meet certain criteria.
- Weight limits. Some Personal Auto policies put weight limits on vehicles like trucks and vans, which are capable of more damage. If your vehicle falls into this “heavy” category, you'll need a Commercial Auto Insurance policy. In some cases, Personal policies will not cover vans or pickups that are used for business at all.
- Commercial vehicles. Some commercial vehicles, such as shuttle busses, box trucks, and tractor trailers, can be purchased personally – but that doesn't mean a Personal Auto policy will cover them. Commercial vehicles are almost always excluded from personal coverage, even if the vehicle's title is in your name.
- Regular business use. Sometimes, “regularly” using your car for work means that your personal policy can't provide enough protection. Generally speaking, “regular business use” is defined as four or more times during a one-month period. However, some types of driving – like commuting to and from work or traveling to meet with clients – are often not considered “business driving” and can be covered by your Personal Auto Insurance.
- Passengers and drivers. If part of your business is transporting passengers for a fee, most Personal policies cannot cover you. In other cases, your Personal Auto policy may not cover your vehicle of an employee has regular access to it.
- Delivering equipment / food. If you deliver goods or food for a fee, your personal policy may not provide adequate protection.
These are just some of the details about your driving usage that can affect your need for a Commercial Auto Insurance policy. Because a gap in your Personal Auto Insurance policy could result in a devastating loss to your business, always check with your insurance agent before making any decisions about your Auto Insurance coverage.
Hired & Non-Owned Auto Insurance for Professional & Specialty Service Businesses
Professional and specialty service business owners should consider purchasing a Hired & Non-Owned Auto Insurance policy if they or their employees ever drive vehicles that are not owned by the business. These situations include…
- Renting or hiring a car. Whether you're on a business trip in another city and need to rent a car to get around or you're using your local car-sharing service, your Hired & Non-Owned Auto Insurance has you covered. Note that car-sharing services usually come with some kind of insurance, usually $300,000 or less per accident. That last part is important because an accident involving multiple injuries could easily break that limit – and that's when your business Auto Insurance would step in.
- Employee vehicles. This is a common situation that many small-business owners do not realize leaves a coverage gap. If your employees regularly drive their own vehicles on behalf of your business, your business could be held accountable if an accident occurs. Hired & Non-Owned Auto Insurance closes that gap.
- Borrowed vehicles. Your business may not borrow a vehicle often, but when it does, Hired & Non-Owned Auto Insurance can protect you and the other party's vehicle.
Hired & Non-Owned Auto Insurance is an affordable policy with many uses. You can usually choose to purchase it as a standalone policy or bundled with your General Liability Insurance.
How Commercial Auto and Hired & Non-Owned Auto Insurance Protects Professional & Specialty Service Businesses
Commercial Auto and Hired & Non-Owned Auto Insurance is designed to safeguard professional and specialty services businesses against the high costs of auto accidents, which can place an undue financial burden on a small business.
The National Highway Traffic Safety Association estimates that the per-injury expense of a work-related traffic accident is $128,178. Your Commercial Auto Insurance policies can absorb much of the cost for you. Most Auto Insurance policies include coverage for two different areas:
- Property Damage. This includes damage done to your vehicle as well as other parties. It can also cover property damage that results collisions with non-automotive objects. Some policies also cover malicious damage and property loss, including vandalism and theft.
- Liability Protection. This section of your Auto coverage protects you from legal and medical expenses, should your business be found liable for an accident.
Your Commercial Auto Insurance or Hired & Non-Owned Auto Insurance can provide these benefits up to your policy's stated limits. Additionally, an Umbrella Liability policy can offer additional funds that can be applied to Auto Insurance claims.
Professional and specialty service owners who regularly transport goods, tools, and / or equipment in their vehicles can also benefit from Inland Marine Insurance. Because standard Auto Insurance and Property Insurance policies cannot cover business property in transit, specialized coverage is necessary.
To learn more, read “What Is Inland Marine Insurance? ” on our blog.
Professional & Specialty Services: Get Commercial Auto or Hired & Non-Owned Auto Insurance Today!
Are you thinking about adding Commercial Auto or Hired & Non-Owned Auto Insurance to your professional or specialty service business's insurance plan? Contact an insureon agent to receive your free insurance quotes or complete our online application to have insurance quotes sent to your email inbox.